CSCO finds buyers again around 46.48
Cisco Systems Inc. (CSCO) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CSCO ended the week -2.08% lower at 46.97 after losing $0.35 (-0.74%) today, notably underperforming the Nasdaq 100 (0.29%) ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CSCO as at Feb 14, 2020):
Friday's trading range has been $0.74 (1.57%), that's slightly below the last trading month's daily average range of $0.78. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for CSCO.
One bullish candlestick pattern matches today's price action, the Hammer. The last time a Hammer showed up on June 22, 2018, CSCO actually lost -2.11% on the following trading day.
After trading down to 46.48 earlier during the day, the stock bounced off the key technical support level at 46.81 (S1). The failure to close below the support might increase that levels importance as support going forward. The market closed back below the 100-day moving average at 47.08 for the first time since February 3rd. After having been unable to move lower than 46.58 in the prior session, the share found buyers again around the same price level today at 46.48.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
With prices trading close to this year's low at 45.84, downside momentum could speed up should Cisco Systems break out to new lows for the year. As prices are trading close to February's low at 46.21, downside momentum might accelerate should CSCO mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Cisco Systems. Out of 308 times, CSCO closed higher 59.74% 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 56.49% with an average market move of 0.64%.