When I made the case for buying CSCO after its earnings disaster in November, I was bracing myself for an extended stay at or near 52-week lows. I even planned to add more on a steep enough decline. After two weeks of slowly drifting downward, CSCO made a bottom. The stock is now climbing out the gutter and battling its way back into November’s post-earnings gap.
*Chart created using TeleChart:
Notice that Cisco is still stuck in a downtrend marked from the April, 2010 highs. The stock also has a critical test of looming, overhead resistance form the 200-day moving average (DMA). So, despite the upside “catch-up” potential, I do not expect an easy road forward to recovery.
Be careful out there!
Full disclosure: long CSCO