The charts show the big upswing from the mid-November low, like most every other stock, resulting in rising wedges, overbot conditions (that the daily is coming off of but the weekly is now printing), and negative divergence have created the weakness just beginning over the last week. The daily chart shows the purple negative divergence that created the smack down in January. The money flow wants to see some price elevation maintained for a week or so before rolling over. CSCO is very much in a wide sideways range for the last two years through 14-21.
With earnings anything can happen in a couple hours; a catapult to glory or a collapse to humiliation. The charts say down to sideways down moving forward. The daily chart has a H&S vibe going with the latest two tops as a double head, or head and right shoulder, so a continued lower move would target 20. Note how price is dancing on top of the 20-day MA, a critical moving average. The bulls need to hold this level, the bears want it to fail. Projection is a move through 18.5-21.5 for the weeks and months ahead. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 2/13/13 at 4:07 PM: CSCO earnings are 51 cents versus 48 cents estimate, and 12.1 billion versus 12.06 billion estimate. A beat but revenue only by a hair on its chinny, chin, chin. Margins look good so the stock is bouncing a bit, now up one-half percent to 21.20. The guidance will occur on the call and that is what is needed. Chambers is speaking now.
Note Added 2/13/13 at 4:18 PM: Chambers says they have some growth but their peers in the business are having trouble meeting growth. Cloud market is good, mobility good, video good. Europe was a negative contributor but shows some signs of hope, but split into northern Europe which is turning the corner, and southern Europe, which will remain challenged. In the U.S., government work is keeping them busy. Governments must spend on IT to improve efficiency. Plans for their dough is to return some cash to shareholders, diversify into switching mobile, etc.., not just servers anymore, also acquisitions. Future growth will be outside U.S. unless tax policy changes. Customers say the year is off to a slow start but they are looking for steady improvement this year. Europe is steady and if governments do not execute too badly, there will be ups and downs, improvement should occur but at a slow pace. That was a little bit of a tempered response at the end of the discussion after the prior more rosie talk. CSCO is up 1.6% so traders like what they hear. Listen for the guidance from the call.
Note Added 2/13/13 at 4:26 PM: Blink and the markets change. Now traders decided to lead CSCO out to the shed out back and have started to beat it, Cisco is now down 1.3% AH's. Chambers is seen running across the lawn to a waiting car. Perhaps the insider traders were told the guidance?
KS, why is gold selling off if the whole reason we're permanent-rallying is because of money pumping?
ReplyDeleteYou are asking a very smart question Anon and the answer is that no one knows for sure. One would think the easiest trade would be long gold and silver since almost 40 nations around the globe are performing at least some level of easing. Some say that calm is returning to markets and that removal of fear takes out the fear premium. This seems odd, however, with all the problems everywhere, although lots of folks are wearing rose-colored glasses. It may be huge holders unwinding positions. Paulson has made a huge mistake with gold in recent years and he and others may be unloading huge holdings to move towards riskier assets, so that supply is coming on the market. On the other side again, the Asian demand remains very strong for gold and central bankers around the world continue to show an interest in gold.
ReplyDeleteThe rally is over ten years old. Traders held $250 ounces of gold, in the packets, in the air in early 2000 and said to buy, and were laughed out, in 2012 that was $1900. So gold does need a rest, folks may forget the huge run so it is good to put in perspective. If Keystone's deflationary scenario comes to pass for the months and years ahead (which is a mightly lonely camp right now, Keystone is sitting at the campfire and Gary Shilling is playing a harmonica, no one else is around), gold will swoon for a couple years. This would make sense since the inflation and hyperinflation may come to be at the end of the 18-yr stock cycle at 2018. Thus, gold may go down to 900-1300, then in 2020 it will be 2K, then 3K then higher.
But as far as an answer, its a toughie right now, maybe in a couple weeks we will see clarity.