Boston, MA 09/16/2014 (wallstreetpr) – Cisco Systems, Inc. (NASDAQ:CSCO) (Closed: 25.06, Down: -0.40%) opened with a sharp gap down, but managed to recover most of that by the end of the day. Investor interest has been more than normal in the last 3-4 sessions on the success of its product, Nielsen ID3 tagging, as the volume of 33 million against an average volume of 25 million clearly shows. The daily candle formed is a bullish one, but the necessary momentum is still missing as the price keeps moving sideways in the slightly slanted range of $24.40-25.25. On an immediate basis, the stock may find it difficult to break above the resistance band of $25.40-50.
Cisco Systems, Inc. (NASDAQ: CSCO), like a lot IT stocks, made the life high at $82 in the early part of 2000 and crashed thereafter. The lowest low at $8.12 was made in 2002. Since then, for the last 12 years the entire price movement has been limited inside a broad range with $27-30 defining the upper boundary and $13.50-14.00 the lower end. Whenever the price touched $27-30 in all these years, the bears turned very active and the only time the higher levels of $33-34 was seen in 2007, the price could not sustain there and quickly returned in the range.
Currently, the price is about 8-10% away from that historical supply area of $27-30. A trendline connecting the 2010 top of $27.74 and the 2013 top of $26.49 is acting as a resistance now after creating a huge 4 year long Cup & Handle pattern with the neckline coming at $26 levels now. But the existence of the supply band at the higher levels would make any bullish breakout from this pattern a suspect.
In the short term, the trend remains up as long as $24.50 remains unbroken and further upside to $26 can be expected, though in a grinding manner. But the investors may turn very cautious and book partial profit at least whenever the price gets close to $27-30.
