Cisco Systems – Cisco Systems Stock at Cusp of New Uptrend

Cisco Systems (NASDAQ: CSCO) on Wednesday reported third-quarter earnings of 79 cents per share, which wins the analyst consensus estimate of 71 cents by 11.27%. This is a 1.28% increase over earnings of 78 cents per share from the same period as last year. A quarterly sales of $12 billion, as reported by the company. This beats the analyst consensus estimate of $11.88 billion by 1.01%. Now, this is a 7.39% decrease over sales of $12.958 billion which is the same period last year.

Cisco Systems - Cisco Systems Stock at Cusp of New Uptrend

It was noted by CEO Charles Robbins during the February conference. Call that ‘longer-term decision-making cycles’ in. Which developing across most product lines because of ‘global uncertainty’.  Due to the shutdown that followed. It’s most likely that. Buying patterns slowed to a crawl by the end of the first quarter. However, a second-quarter pick-up will be a good idea because of. Improving sentiment as well as a high-tech customer. The base that needs to replace and upgrade equipment irrespective of the pandemic.

Cisco stock for two decades has been underperformed. But price action, over the past 5 years has improved, more than doubling into the second quarter of 2019. When the uptick stalled in the mid-$50s. More so, the resistance level is still more than 20 points below that of the March 2000s. All-time high at $82.00.

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Cisco Systems Long-Term Chart (1992-2020)

In the 1990s, the stock split seven times, with extraordinary. Buying interest driven by the fall of communism and the rise of the internet. This uptrend came to an end at $82.00 in March 2000. Which was just two sessions after the final split. Paving the way to a steady downtick that found support at $50 in May. Now, this level broke in November, which triggered a steep slide which finally ended in the single digits in the fourth quarter of 2002.

An uptick during the mid-decade bull market topped out below the 382 Fibonacci sell-off retracement level in 2007, which yielded renewed selling pressure which held above the 2002 low during the 2008 economic collapse. Howbeit, weak buying power into the new decade failed in building a sustained uptrend, which generated successful tests at the 2009 low in 2011 and 2012. In March, a positive feedback loop then set into motion, carving a slow-motion advance that reached a 2007 high.

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As of November 2017 breakout caught fire, which lifted the stock in two broad rally waves which reached a 19-year high at $58.26 in July 2019. In August, a small double top with resistance at that level broke to the downside, which signaled a renewed decline, which broke through 2018 support near $40 during March’s 2020 vertical downdraft. In early April, the stock bounced just above new resistance and has spent the past five weeks which ground sideways in a holding pattern.

Cisco Systems and the Pandemic

As stated by Chuck Robbins, CEO of Cisco in a statement, ‘During this extraordinary time, its priority has been supporting its employees, customers, partners, and communities, while positioning Cisco for the future’.

In his words, ‘The pandemic has driven organizations across the globe to digitize their operations and support remote workforces at a faster speed and greater scale more than ever before. We remain focused on providing the technology and solutions our customers need to accelerate their digital organizations.

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