CSCO broke above the 3-1/2-month reverse head-and-shoulders resistance (from 31 May/21 Jul/11 Aug highs). The positive daily MACD studies suggest that there is scope for further strength towards 16.82 (31 May high,
Resistance 1).) then 17.99 (11 May high,
Resistance 2) near 50% retracement of the 22.34/13.30 seven-month decline. An upside break there would allow bulls to seek 19.70 near the head-and-shoulder target at 19.30 (
Resistance 3).
However, a break below 15.41 (07 Sept low, Support 1) would expose the right shoulder support at 14.90 (19 Aug low, Support 2). Further weakness below would risk a deeper setback towards 13.30 (09 Aug 2011 YTD low, Support 3).
Trading Indication:
Short-term (Intraday):
Buy at 15.20 or lower;
Target at 17.99 and higher; Stop Loss at 14.90 (2.0%)
Long-term: Possibly sell higher
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