Now that CSCO has announced earnings where does the stock go from here?
We have pointed out on the chart above where the next minor and major resistance levels are These are the important levels to watch and the levels CSCO needs to work through in order to break out of its slump and overall price downtrend
The first levels of minor resistance are at $17.50-$17.79. These are the recent highs as well as the 100 day moving average levels which are the obvious reference levels for many traders These can be more easily taken out but the major resistance overhead may prove more difficult.
The Major resistance we see is around the $18.50 area which may be quite tough to get through at least on the first couple attempts.
CSCO could hit these levels and be sent back into its base or it could break out through these resistance levels. If the breakout occurs then we need to consolidate above these old resistance levels. These old resistance levels need turn into new support levels which would give us a very high probability buy setup.
How we would trade CSCO- We keep an open mind with all stocks. We drown out all news and opinions and focus on how those news and opinions are digested by the major market participants. This is much more clearly spelled out on the chart where we can see how all buyers and sellers balance each other out. This is especially evident around support and resistance levels.
How the stock behaves around those levels will tell you how strong the bulls and bears are and who is in control. If these key levels fail, then the downtrend is still in place and the bears are still in control. If these old resistance levels don’t hold and the stock hits new highs and then are able to hold these levels, then we may be in a transitional market from bear market to bull market in CSCO.
This is why we avoid buying ahead of big news announcements especially in these types of markets. We prefer to sit back and see how the dust settles after the news and what the next high probability trade is either long or short. The signposts are all there, you just have to know where to look for them.
We will post a part 2 to this story when it is more evident where CSCO goes next.
email us with any questions or comments: [email protected]
Thanks,
The Better Stock Entries Stock Report
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