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Two Ways to Play: Speculation Is High in Cisco


Strengthen your portfolio in good times and bad.

Speculation Is High in Cisco

Shares of Cisco (CSCO) rose the most in five months to a new 52-week high yesterday after the company said it will unveil a product that will "forever change the Internet and its impact on consumers, businesses, and government."

In a story by Bloomberg, the network equipment maker hasn't yet released any details, but analysts are already speculating the company will unveil a router that's capable of transmitting Internet traffic at 120 gigabits per second, or more than two terabytes per device. That's the kind of speed that would appeal to phone carriers like Verizon (VZ), Sprint (S), and AT&T (T), as well as Internet service providers.

Call options traded 237,000 times ahead of the announcement, or 6.4 times the daily average during the past four weeks. The announcement is due out at 10 a.m.

From the Bull Pen: If you rode Cisco for the past few days, then congratulations. But be careful about starting fresh positions as there's a lot of speculative energy that could disappear in an instant. Instead, bulls can look to Verizon as the downtrend appears to be done. A sell stop can be set below yesterday's low (near $29).

From the Bear Cave: Tech bears may want to just keep an eye on the technology ETF (XLK). Keep an eye out for a lower low below $23.30. If confirmed, consider a downside position with a buy stop above that level.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei -0.17%, India -0.29%, Hang Seng 0.05%, Shanghai 0.52%, and Taiwan 0.11%.

Across the pond, we see the FTSE -0.75%, DAX -0.63%, CAC -0.64%

As of 8:20 AM EST, S&P Futures are trading -03.25 to 1133.75. Nasdaq futures are -3.250 to 1884.75.

A Look at Commodities

Over in commodities, crude oil is -1.32 to 80.54 while gold is -7.700 to 1116.30 this morning. Silver is -0.252 to 17.025 and copper -0.0405 to 3.3710.

The dollar Index is +0.0350 to 80.7950.

No economic events scheduled for today but click here for the full trading radar.

Good luck!

Minyanville's stock portfolio, FlexFolio by Quint Tatro, is beating the S&P 500 by 26% since inception. With a 14 day FREE trial you'll get trade alerts, interactive strategy sessions and access to the full portfolio. Learn more.
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No positions in stocks mentioned.

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