Cisco Systems Stock Turns Positive in Pre-Earnings Charts
Cisco
Systems Inc. (CSCO - Get Report) is one
of the cheapest components of the Dow Jones Industrial Average in terms of
paying a dividend. The stock ended 2018 with a dividend yield of 3.32% making
it one of the eight "Dogs of the Dow" for 2019. At Friday's close of
$47.19, the stock is up 8.9% year to date and up 17.2% from its Dec. 24 low of
$40.25. The stock still has a favorable dividend yield of 3.14%.
At
the end of January, the stock looked wobbly, but when it stayed above its
200-day simple moving average at $44.86 on Jan. 28, it avoided a "death
cross" and regained momentum. The weekly chart helped as it was already
positive at the end of the week of Jan. 25.
Cisco
reports earnings after the closing bell on Wed., Feb. 13, and analysts expect
earnings-per-share to be between 72 cents and 74 cents. The tech giant makes
Internet Protocol networking products for the communications and IT industries.
Some indicate that the company's outlook could be clouded by tariffs and weak
global economies as uncertainties delay upgrade projects.
Cisco's
CEO Chuck Robbins appeared on CNBC's "Squawk Box" last week and
talked about tariffs, investments in cyber-security and next-generation
infrastructure. Cisco is involved in a transformation into software development
and subscription offerings and guidance on these services could be the wildcard
in this earnings report.
Cisco
is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted
before Jim Cramer buys or sells CSCO? Learn more now.
The
Daily Chart for Cisco Systems
Courtesy
of MetaStock Xenith
Cisco
has been above a "golden cross" since Oct. 16, 2017, when the stock
closed at $33.54. A "golden cross" occurs when the 50-day simple
moving average rises above the 200-day simple moving average and indicates that
higher prices lie ahead. Note that between Jan. 24 and Feb. 5, a "death
cross" nearly warned that the stock would be heading lower, but this
bearish warning did not occur.
The
close of $43.33 on Dec. 31 resulted in three of the horizontal lines on the
chart. My semiannual and annual value levels are $41.70 and $39.84,
respectively, with my quarterly risky
level at $49.39. The close of $47.29 on Jan. 31 resulted in my monthly risky
level for Feb. at $49.39. This week's value level is $43.84. The 50-day and
200-day are $45.16 and $45.02, respectively.
The
Weekly Chart for Cisco Systems
Courtesy
of MetaStock Xenith
The
weekly chart for Cisco is positive with the stock above its five-week modified
moving average of $46.00. The stock is well above its 200-week simple moving
average or "reversion to the mean" at $34.33. The 12x3x3 weekly slow
stochastic reading ended last week at 57.75 up from 49.30 on Feb. 1.
Trading
Strategy: Buy weakness to my weekly, semiannual and annual value levels at
$43.94, $41.70 and $39.83, respectively, and reduce holdings on strength to my
monthly and quarterly risky levels at $49.13 and $49.39, respectively.
A
starter-position is justified, given its favorable dividend yield as one of the
eight "Dogs of the Dow" for 2019.
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