After a big gap down, Cisco is becoming interesting. Let's take a look at what happened last 6 months.
After a strong rally, the stock gapped down strongly in August, a sign that the big uptrend is over. At the 3rd wave bottom, which at the time i thought to be a C from an ABC correction we had a tripple bullish divergence, both on the MACD lines and histogram, indicating that there might be some up movement. There was up movement, till the earnings report dissapointed strongly. After the gap down following the bad Q3 earnings report, the stock stopped declining at the 20 psychological level, where we also had older support levels, forming what looks like a sharp bottom. Last 3 weeks, i can see some bullish activity.
Considering that Cisco was well correlated with the DOW Jones last years, I expect them to synchronize again, shorting the Dow now would be a bad thing to do, so the alternative is going long Cisco.
If we look at the way the stock moves, I mean the lower lows and lower highs, we notice that this high is exceeding the previous one made after there were some bulls buying after the Q3 earnings report.
The MACD has been giving us bullish signals a week ago, all details outlined on the chart.
IF and only IF we have a close over the blue weekly resistance line, I am going long, first two targets outlined on the chart. However, if we close over that level i expect the stock to go even higher than my targets, but it's a long road till there. First let's see 25 bucks per share
After a strong rally, the stock gapped down strongly in August, a sign that the big uptrend is over. At the 3rd wave bottom, which at the time i thought to be a C from an ABC correction we had a tripple bullish divergence, both on the MACD lines and histogram, indicating that there might be some up movement. There was up movement, till the earnings report dissapointed strongly. After the gap down following the bad Q3 earnings report, the stock stopped declining at the 20 psychological level, where we also had older support levels, forming what looks like a sharp bottom. Last 3 weeks, i can see some bullish activity.
Considering that Cisco was well correlated with the DOW Jones last years, I expect them to synchronize again, shorting the Dow now would be a bad thing to do, so the alternative is going long Cisco.
If we look at the way the stock moves, I mean the lower lows and lower highs, we notice that this high is exceeding the previous one made after there were some bulls buying after the Q3 earnings report.
The MACD has been giving us bullish signals a week ago, all details outlined on the chart.
IF and only IF we have a close over the blue weekly resistance line, I am going long, first two targets outlined on the chart. However, if we close over that level i expect the stock to go even higher than my targets, but it's a long road till there. First let's see 25 bucks per share