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Two Ways To Play: Cisco Loses Its Mojo


Strengthen your portfolio in good times and bad.


Chambo On Cisco: Revenue Will Be Flat-O

Cisco (CSCO), the networking equipment giant, fell in after-hours trading after the company issued a disappointing forecast. According to the Wall Street Journal, profits were flat amid an 8.1% increase in revenue. But shares fell because CEO John Chambers, widely known on Wall Street as Chambo, said second-quarter revenue would likely fall between 5% and 10% from a year earlier.

On the conference call, Chambo called this period one of the most difficult times in his career to provide a reliable forecast. However, he did say projections of 12% to 17% growth over the next 3 to 5 years remain in tact.

Professor Jeff Macke mentioned Cisco yesterday in Energy Crisis? What Energy Crisis?

From the Bull Pen: Consider McCafee (MFE) pulling back to its 20 DMA ($29.70). This is a favorite of Professor Adam Katz. Those bullish can set a near-term sell stop below that level.

From the Bear Cave: Chambo's usually optimistic - and sometimes overly so. If his comments have such a disappointing tone, what does it say for the overall sector? Consider the Ultrashort QQQ (QID) for an upside play. One can set a tight sell stop 2 points from entry.

Quick Check Around the World

Asian trading closed with the Hang Seng -7.08%, Nikkei -6.53%, Sensex -3.81%, Taiwan -5.71% and Shanghai -2.44%.

Glancing towards Europe, we see the CAC -3.62%, DAX -4.26%, FTSE -3.59%

As of 8:15 a.m. EST, S&P Futures are trading -17 to 941, and Nasdaq futures are -33 to 1272.

A Look At Commodities

Crude oil is trading -1.30 to 64.03. Gold is +1.00 to 743.30. Silver is -0.065 to 10.390 and copper is -3.250 to 178.15.

The dollar index is +1.009 to 85.605.

On the Radar


08:30 Nonfarm Productivity
08:30 Unit Labor Costs
08:30 Initial Jobless Claims
08:30 Continuing Claims
08:30 ICSC Chain Store Sales YOY

Click here for the full trading radar.

Thirsty Thursday! Good luck and see you at Happy Hour!

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Position in QID

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