Technical View - Cisco
Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.
Cisco has declined some 30% from its January highs in what looks like a three-wave fashion. The recent lows on 5/17 were not confirmed by daily momentum measures and came with the C wave of the ABC decline from the January highs being nearly 0.618 times the size of the A wave, a common Fibonacci relationship. While a more bearish intermediate term interpretation of the technicals is possible, the more likely of the two interpretations may call for a new impulse wave off the 5/17 lows to resolve decidedly higher (above the April highs at near $25) and perhaps even to new highs above the January $29.39 level. For now however, we'll take it one step at a time and attempt to decipher the short term path and wait to see how the intermediate term trend plays out.
Vis-à-vis the short term then, the move up from the 5/17 lows has all the looks of a near completed "5" wave move with the 5th wave extending (i.e. the 5th wave being longer than both the 3rd and 1st impulse waves and the 1st and 3rd impulse waves being nearly equal). Near term these 5 waves up from 5/17 are expected to correct to lower Fibonacci support in the $22.00-$22.80 area where support is expected to be found. It is possible that our anticipated correction does not take place until prices head toward the $24.70 region; if that's the case, the best scenario may be to still await a correction of this impulse off the 5/17 lows. That CSCO is also the 4th largest weighting in the NDX, at 4.85% of that index's weight, lends further evidence to this intermediate term bullish view of CSCO. In the NDX I am looking for a nice multi-day (8-15 sessions) correction to lower support to take place before getting a move higher.
This is precisely the view in CSCO as well. Ideally a correction in CSCO will play out over the next 8-15 sessions and find support in the cited levels. That will be a key area, depending on how prices reached that level (corrective or impulsively) for the next possibly much larger impulse wave up based on the analysis. For now we will wait to see if an anticipated correction in CSCO that traces out a corrective pattern toward lower supports unfolds.
n on this website solely reflects the analysis of or opinion about the perf=
ormance of securities and financial markets by the writers whose articles a=
ppear on the site. The views expressed by the writers are not necessarily t=
he views of Minyanville Media, Inc. or members of its management. Nothing c=
ontained on the website is intended to constitute a recommendation or advic=
e addressed to an individual investor or category of investors to purchase,=
sell or hold any security, or to take any action with respect to the prosp=
ective movement of the securities markets or to solicit the purchase or sal=
e of any security. Any investment decisions must be made by the reader eith=
er individually or in consultation with his or her investment professional.=
Minyanville writers and staff may trade or hold positions in securities th=
at are discussed in articles appearing on the website. Writers of articles =
are required to disclose whether they have a position in any stock or fund =
discussed in an article, but are not permitted to disclose the size or dire=
ction of the position. Nothing on this website is intended to solicit busin=
ess of any kind for a writer's business or fund. Minyanville management=
and staff as well as contributing writers will not respond to emails or ot=
her communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.<= /p>
Daily Recap Newsletter