How to Play Cisco Systems Ahead of Earnings

The shares have been in a rally phase since early November.

During Friday's Mad Money program Jim Cramer told viewers his day by day game plan for this week in the markets. He pointed out that on Wednesday we'll hear from Lowe's (LOW) , Target (TGT)  and TJX Companies (TJX) , along with Analog Devices (ADI)  and Cisco Systems (CSCO)  in the tech sector.

Cramer expected all of these results to be spectacular. 

Let's check out the charts of CSCO. 

In the daily bar chart of CSCO, below, we can see that the shares have been in a rally phase since early November. Prices are trading above the rising 50-day moving average line and the bullish 200-day line.

The On-Balance-Volume (OBV) line shows a positive trend from late October telling us that buyers of CSCO have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has just crossed to the upside for a fresh outright buy signal. 

 

In the weekly Japanese candlestick chart of CSCO, below, we are presented with a bullish picture. Prices are in a longer-term uptrend and are well above the rising 40-week moving average line.

 

The OBV line is going in the right direction and the MACD oscillator is bullish. 

 

 

 

In this daily Point and Figure chart of CSCO, below, we can see a potential upside price target in the $71 area.  

 

 

In this weekly close-only Point and Figure chart of CSCO, below, we used a five-box reversal filter. This chart yields a possible target in the $95 area.  

 

 

 

Bottom-line strategy: Traders should continue to hold longs from previous recommendations. Those who are flat could go long CSCO near $52 risking to $49. Our nearest price target is $71.

 

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