CISCO SYSTEMS INC (NASDAQ:CSCO) - A Strong Technical Setup for Breakout Potential

CISCO SYSTEMS INC (NASDAQ:CSCO) has emerged as a notable candidate for technical investors, displaying both strong technical health and a promising consolidation pattern. The stock’s recent performance and setup suggest potential for a breakout, making it worth a closer look.

Technical Strength

CSCO currently holds a perfect 10 in ChartMill’s Technical Rating, reflecting its robust trend across multiple timeframes. Key factors contributing to this score include:

• Positive Trends: Both short-term and long-term trends are upward, indicating sustained momentum.
• Relative Strength: The stock has outperformed 87% of the market over the past year, with gains well-distributed over time.
• Industry Leadership: Within the Communications Equipment sector, CSCO ranks ahead of 71% of its peers.
• 52-Week High Proximity: Trading near its yearly high, CSCO is showing leadership compared to the broader S&P 500.

The stock also exhibits a bull flag pattern, a short-term pullback after a strong rally, which often precedes another upward move.

Setup Quality

With a Setup Rating of 8, CSCO presents a well-defined consolidation pattern, offering a clear entry and exit structure:

• Support Levels: Key support sits at $63.03, backed by additional zones at $57.21 and $54.53-$54.77.
• Resistance Zone: A notable resistance area begins at $66.06, which could serve as a potential breakout target.
• Tight Trading Range: Recent price action has been contained, reducing volatility and improving the risk-reward profile.

A suggested trade setup includes an entry at $64.78 (above the 10-day moving average) and a stop-loss at $63.02, limiting downside risk to 2.72%.

For a deeper dive into the technicals, review the full technical report for CSCO.

Our Technical Breakout Setups screener provides more breakout candidates updated daily.

Disclaimer

This is not investment advice. Always conduct your own analysis before making trading decisions.