CSCO still stuck within tight trading range
Cisco Systems Inc. (CSCO) Technical Analysis Report for Aug 13, 2019 | by Techniquant Editorial Team
CSCO finished Tuesday at 52.72 gaining $1.18 (2.29%), slightly outperforming the Nasdaq 100 (2.2%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 52.36, the share confirmed its breakout through the previous session high after trading up to $0.71 above it intraday.
Daily Candlestick Chart (CSCO as at Aug 13, 2019):
Tuesday's trading range has been $1.87 (3.63%), that's far above the last trading month's daily average range of $1.04. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for CSCO. Prices continued to consolidate within a tight trading range between 51.20 and 53.36 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on May 10th, CSCO actually lost -3.86% on the following trading day. Regardless of a weak opening the stock managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 51.20 earlier during the day, Cisco Systems bounced off the key technical support level at 51.21 (S1). The failure to close below the support could increase that levels significance as support going forward. Unable to break through the key technical resistance level at 52.86 (R1), the market closed below it after spiking up to 53.07 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 51.34 in the previous session, CSCO found buyers again around the same price level today at 51.20.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 53.36 where further buy stops might get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Cisco Systems. Out of 416 times, CSCO closed higher 54.57% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 60.34% with an average market move of 0.79%.