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The Inner Circle, Issue #420 - Melt Up or Melt Down?
April 27, 2014
Hi <>,

Melt Up or Melt Down?

FROM: Melt Up or Melt Down?

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 'UP'.

Week ending 4/25 CSCO closed 23.00 (Yield: 3.26%).

CSCO ranks 6th of the 10 highest yielding DJ-30 'Dow Dogs'.

CSCO is now 1st of 5 lowest priced among the 'Dow Small Dogs'.

Key primary support algo to watch: 3/17 low 21.27 (lowest low - last 3 mo).

CSCO found resistance: 4/4 high 23.35.

CSCO recent support pivot: 4/11 low 22.43 (lowest low - last 3 wks).

CSCO currently searching for support.

CSCO currently above both the 50 & the 200 sma on daily chart (favorable).

CSCO currently under the 50 & above the 200 sma on weekly chart (mixed).

Earnings are rising, so far (management lowered forward sales projections).

Earnings: 5 yr avg EPS: 1.36. TTM EPS: 1.52. Current P/E: 15.13. Forward P/E: 11.71.

Est Avg Yr EPS: 1.99. Est Yr High EPS: 2.06. Est Yr Low EPS: 1.96 (per analysts).

The combination of low price/high yield + support at the 50 & 200 sma = opportunity (IMO).

Whether you buy stock, protect with puts (& collect dividends) or buy calls (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 under attack.

Next earnings date: 5/14/14.

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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