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Fan Yang

Cisco (CSCO) in Bullish Continuation Breakout

Cisco $CSCO has been consolidating but retains a bullish bias and could be in a bullish continuation breakout.

CSCO Daily Chart

(click to enlarge)

Bullish Signs:
- While CSCO has been trading in a sideways consolidation mode since March, we should note that it also maintained a bullish bias.
- I was anticipating more of a sideways consolidation, where price would reach back into the $40-$41 area before finding support.
- However, price held above the 200-day simple moving average (SMA), which made it miss the falling channel support as well. These were signs that bulls were in charge.
- Then we saw a bullish breakout from the falling channel, followed by a few days of indecision. During these days, price dipped back a little but found support at $43 before surging up on the back of its latest earnings, which beat expectations across the board.

- A week later, price is approaching the channel resistance we see on the daily chart.
- But, I think we should have confidence for the bullish outlook. 
- The candlesticks from Thursday/Friday last week tells me bulls are in charge.
- I think the market will keep CSCO above $45 .
- If it doesn't, the next key level will be $43. A break below that would wipe out my bullish outlook.
- But for now, I am still confident that CSCO will push above $46.55 and head towards the $50 mark this year, especially if price holds above $45 this week.

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