Cisco Systems (CSCO) has rallied over the past six weeks to come within "striking distance" of new highs for 2017. A review of the current state of the indicators and charts reveals a bullish set up and a probable upside breakout.
Let's check out the charts below to see what strategy we want to suggest going forward.
In this daily bar chart of CSCO, below, we can see a choppy trading pattern the past twelve months. There is a rally from January to March that fizzles out and by May has given back much of the advance. CSCO re-bases from June to early September before the most recent rally. Technically CSCO looks to be on pretty good footing with prices above the rising 50-day average line and the rising 200-day average line. The On-Balance-Volume (OBV) line turns up in early July has broken above its February high signaling three months of aggressive buying. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bullish set-up above the zero line.
In this weekly bar chart of CSCO, below, we can see that prices are currently above the rising 40-week moving average line. The weekly OBV line has not (yet) made a new high but it is improving. The weekly MACD oscillator is crossing above the zero line now for an outright go long signal.
In this Point and Figure chart of CSCO, below, we can see that a trade at $34.27 will be a new high on this kind of chart and open the way for a possible price target of $40.27 for CSCO.
Bottom line -- there is some resistance in the $34.00-$34.50 area that could stall or even reverse the rally currently under way. A close above $34.50 would be a breakout and tell traders to go long risking below $32.50 and looking for $40-$41 on the upside.