Cisco Systems

Inc (CSCO)
gapped below its 50-day simple moving average at $50.00 on Thursday and is now also well below its quarterly and monthly pivots at $50.82 and $50.00. Its nearest support is its 200-day simple moving average at $46.51.

Earlier this month the network equipment company announced that it is pulling out of Russia and in the process destroyed $23.42 million worth of equipment and furniture.

Cisco has a p/e ratio of 16.49% with a dividend yield of 3.05%, according to Macrotrends. The stock has an excellent history of beating earnings-per-share estimates. Its latest beat was on February 15. This followed 21 consecutive quarters of beating EPS estimates.

The Daily Chart for Cisco Systems

Courtesy of Refinitiv XENITH

The daily chart for Cisco goes back two years. The stock was on-the-rise in 2021 and peaked at $64.28 on December 29, 2021. The stock first failed to hold its 50-day and 200-day simple moving averages at $55.33 and $56.46 on April 5, 2022. This led to the decline to $38.61 on October 13, 2022.

The rally from this low was significant with a secondary high of $52.56 on April 3, 2023, up 36%. This high was above the 50-day and 200-day simple moving averages. From this high to Thursday’s low of $47.99 is 8.6% so far.

The 50-day SMA is now $50.00 with the 200-day SMA at $46.51. The horizontal lines at the center of the chart are the monthly and quarterly pivots at $50.00 and $50.82. The lower horizontal line is the semiannual value level at $42.58.

The Weekly Chart for Cisco Systems

Courtesy of Refinitiv XENITH

The weekly chart for Cisco Systems will be downgraded to negative on a close this week below its five-week modified moving average at $49.76. The stock is just below its 200-week simple moving average or ‘reversion to the mean’ at $48.52. The 12x3x3 weekly slow stochastic reading is projected to decline to 71.02 this week, which is negative. The stochastic reading ranges between 00.00 and 100.00 where a reading above 80.00 is overbought and a reading below 20.00 is oversold.

Trading Strategy: Buy shares of Cisco Systems on weakness to its semiannual value level at $42.58 Reduce holdings on strength to its quarterly pivot at $50.82.