1CSCO trade ideas
At Least A 1% Drop For CiscoOn April 5, 2017, CISCO Systems Inc. ( NASDAQ:CSCO ) crossed below its 50 day moving average (MA). Historically this has occurred 236 times and the stock does not always drop. The stock has a median loss of 2.851% and a maximum loss of 30.080% over the next 5 trading days.
When we take a look at other technical indicators, the relative strength index (RSI) is at 34.1632. RSI tends to determine overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. The current reading declares the stock is trending down and will quickly make it to oversold territory within the next 5 trading days.
The true strength index (TSI) is currently 23.4246. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The current direction declares the stock is moving down.
The positive vortex indicator (VI) is at 1.1365. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The current reading declares the stock is moving down.
The stochastic oscillator K value is 17.5800 and D value is 17.2248. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The current reading declares the stock has been moving down, but is due to move up again in the near future.
Considering the moving average crossover, RSI, TSI, VI and stochastic levels, the overall direction appears to be heading down. Based on historical movement compared to current levels and the current position, the stock could lose another 1.1% over the next 5 trading days. The stock will revisit a previous resistance level around 32.60 which could turn into new support. A possible reversal at this point could also occur due to the Stochastic level in the oversold level. However, a quick drop could cause the stock to drop to the Macro support level around 31-31.50 before it reverses up again.
CSCOPrice pushed up through BB and then below them. Then price moved below 20 MA. This gives me reason to believe a significant short movement may be imminent.
Therefore, I bought a 30 day put option (Apr17) on the movement.
I stand to lose $108.49 if the option does not fulfill the movement I anticipate.
Take profit target is at 200 MA.
cisco.....the beast watchinguptrend...
in my view chart has broken a major pivot point on daily time frame and i suppose it will start a strong movement toward upside...
after a good bullish candle above the blue line on monday i will enter to buy position and sl will be under the red line......
good luck
