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The Inner Circle, Issue #444 - "A Terrible Slaughter Is Coming"
October 12, 2014
"A Terrible Slaughter Is Coming"
FROM: "A Terrible Slaughter Is Coming".
Stocks rise until they meet resistance then reverse until they find support.
Cisco Systems (CSCO):
MarketClub's Trade Triangle Technology algorithm currently ranks CSCO Primary (monthly) Trend 'DOWN'.
Week ending 10/10 CSCO closed 23.34 (Yield: 3.14%).
CSCO currently ranks 7th of the 10 highest yielding DJ-30 'Dow Dogs'.
CSCO currently ranks 1st of 5 lowest priced among the 'Dow Small Dogs'.
Key primary support algo to watch: 7/22 high 26.08 (highest high - last 3 mo).
CSCO recent resistance algo to watch: 10/6 high 25.42 (highest high - last 3 wks).
CSCO 10/6 high 25.42 has been re-confirmed to be the pivot point high on the weekly chart, a reasonable downside target would be 23.61. Target achieved 10/10 low 23.34.
NOTE: If the 10/10 low 23.34 also turns out to be the pivot point low (not likely) on the weekly chart, a reasonable upside target (intermediate term) would be 24.49.
The 12/13 low 20.22 is indicating a reasonable upside target of 31.75 (monthly chart).
However, IF the 7/22 high 26.08 also turns out to be the pivot point high on the monthly chart, a reasonable downside target would be 19.81.
CSCO currently searching for support.
CSCO currently below both the 50 & the 200 sma on daily chart (Unfavorable).
CSCO currently testing support at the 50 but above the 200 sma on weekly chart (Mixed).
CSCO currently above the 50 but below the 200 sma on the monthly chart (Mixed).
Earnings are rising (as announced after the close 8/13). However, management expects lower revenues going forward, cutting 6000 jobs & concentrating on areas that are growing (such as 'cloud').
Earnings: 5 yr avg EPS: 1.40. (ttm) EPS: 1.49. Current P/E: 15.66. Forward P/E: 11.22.
Est Avg Yr EPS: 2.16. Est Yr High EPS: 2.27. Est Yr Low EPS: 2.00 (per analysts).
Next Qtr Est Avg EPS: 0.53. Est High EPS: 0.55. Est Low EPS: 0.51. Prior Qtr EPS: 0.43.
Next earnings date: 11/12/14.
The combination of low price/high yield + support at the 50 & 200 sma (weekly charts) = opportunity in the intermediate term (IMO).
Whether you buy stock, protect with puts (& collect dividends) or buy calls, puts or do debit/credit spreads (whatever suits your style), a limited risk/high reward position can be constructed. Each strategy has its own follow-up tactics, depending on how it plays out.
NOTE: CSCO is deeply involved in cyber security; we are constantly under attack.
Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!
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