Breakouts are the name of the game today as our three big stock charts cover Cisco Systems, Inc. (NASDAQ:CSCO), Mosaic Co (NYSE:MOS) and Intel Corporation (NASDAQ:INTC), all of which are moving above or challenging strong technical resistance levels.
A breakout above these key prices are likely to lead to significantly fast and aggressive rallies higher. Hold onto your hats!
Cisco Systems (CSCO)
Cisco shares are making a break for it this morning on news that the company is acquiring AppDynamics. The stock has spent the past few months trading in a tight trading range. Technical trendlines have tightened that range lately. The move today, should fuel a breakout higher.
Shares of the Cisco will open the day above their 50-day and 100-day for the first time since November, potentially making the beginning of a new bullish trend.
On an interesting technical note, the 10-day volatility of Cisco shares dropped to less than 50% of the 100-day volatility recently. This is often a sign that a stock is ready to make a breakout move.
Shares of Cisco are setting this bullish course weeks ahead of their earnings announcement, scheduled for the Feb. 15. The stock tends to make large tradable moves, both higher and lower, ahead of earnings reports. Yesterday’s breakout may be the initiation of the Cisco pre-earnings trade.
Mosaic Co (MOS)
Mosaic made a MONSTER move yesterday on heavy volume as the stock got an upgrade from Cowan. More notable was the fact that the stock broke above the $32 level. We identified this level weeks ago as a potential trigger for a short covering rally given the large bets against the stock.
Yesterday’s move took Mosaic to overbought readings while breaking into new relative high territory, a combination that will fuel a more short covering, though we expect the rally to see some selling pressure soon.
The last pullback from an overbought reading mounted to a 10% decline in the stock. The current chart screams for support at the $32 level, which is where we expect any profit-taking to see the stock land.
Mosaic doesn’t report earnings until Feb. 7, meaning there is plenty of time for profit-taking to put the shares at a great entry price just ahead of earnings, when we expect to see the stock price get another bullish kick higher.
Intel Corporation (INTC)
Semiconductor companies have been leading the market higher without a familiar name, Intel. The semiconductor giant has been notably absent as it remained locked in a trading range, until the past few days.
Shares of Intel are finally making a move to break above the $36 level, which would represent taking out the October highs.
Traders have been tepid on their response to Intel as the volume has been lighter than normal on these moves. The past two days have been different though as volume registered in the high end of the past six months.
The increase in volume tells us that the market is now allocating funds to Intel ahead of their Thursday afternoon earnings call. The message here may be positive. A break above the $32 level and anything outside of an earnings disappointment will spark a technical rally that should drive prices toward the $40 level over the intermediate-term outlook.