Cisco Systems, Inc. (CSCO) — CSCO stock has more or less chopped back and forth with the broader market year to date, but it looks structurally sounder. And recent price action suggests further upside in the near term and even greater potential through a six-month lens.
The company reported better-than-expected quarterly results Wednesday after the close with earnings of $0.59 per share on revenue of $12.8 billion. Investors liked what they heard and CSCO stock jumped 2.9% on Thursday.
Cisco has done some restructuring, which includes a new CEO and a focus on security. As a result, analysts seem to think CSCO stock now presents a better growth opportunity than it has in some time.
From a technical perspective, shares meaningfully broke past resistance in late 2014, but ran out of steam in March. CSCO stock has been consolidating in a choppy range ever since but has held above resistance. The longer shares remain above this line, the better the odds of an eventual continuation higher.
On the daily chart below, note that the 200-day moving average (red line) broadly acts as support and once again did so when it was tested and marginally pierced on Wednesday.
On Thursday, CSCO stock gapped higher and overcame diagonal resistance from May, as well as its 100-day simple moving average (blue line). While shares closed off their intraday highs, a favorable bullish stance was established with Thursday’s rally.
Active investors with shorter time frames could see if the stock can muster enough upside momentum for a run to the $29.50 to $30 area. Investors with at least six months should look to build a partial positon near current levels. As long as the support on the multiyear chart holds, they can add to this position on any pullback for an upside target in the low $30s.
