CSCO stuck within tight trading range
Cisco Systems Inc. (CSCO) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
CSCO finished the week 9.04% higher at 38.82 after losing $1.76 (-4.34%) today on low volume, slightly underperforming the Nasdaq 100 (-3.91%). Trading $0.93 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Wednesday, CSCO actually gained 7.72% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CSCO as at Mar 27, 2020):
Friday's trading range has been $1.73 (4.41%), that's far below the last trading month's daily average range of $2.79. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for CSCO. Prices continued to consolidate within a tight trading range between 37.37 and 40.92 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, the share closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 37.37 (S1). Prices are trading close to the key technical resistance level at 40.15 (R1).
Although the stock is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the close-by swing high at 40.92 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 37.37 where further sell stops could get activated. As prices are trading close to March's high at 41.90, upside momentum might accelerate should Cisco Systems mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Cisco Systems. Out of 32 times, CSCO closed higher 62.50% 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 two trading days, showing a win rate of 62.50% with an average market move of -0.02%.