• Chart of the Day: Cisco Systems, Inc. (CSCO)

    by  • October 16, 2013 2:37 pm • Charts to Watch, Quick Hits, Tony Venosa's Chart of the Day

    Today’s chart is of Cisco Systems, Inc. (CSCO) which designs, manufactures, and sells Internet protocol (IP) based networking and other products related to the communications and information technology industries worldwide.

    Ticker:  Cisco Systems, Inc. (CSCO)

    What I Am Looking At:

    • Shares up nearly 17 percent year-to-date, but remains in a short-term downtrend since its August peak
    • Underperforming the S&P 500 Index by nearly 8 percent since the index peaked on September 18th
    • Shares appear to be ready to breach 200-day moving average and fill in gap area from May 2013
    • The 50-day buy-to-open call/put ratio exceeds 3.30, indicating a strong preference for calls versus puts
    • An unwinding of these bullish bets could pressure shares lower
    • Short interest is quite low, 1.1 percent of the float is sold short
    • Based on average daily volume, 1.5 days for shorts to cover
    • Optimistic analyst community as 20 out of 28 analysts rate the shares a “buy’ or better,  possible future downgrades
    • Unconfirmed earnings report set for November 13th


    Conclusion:  Shares look to be headed downwards to fill in the May upside gap and target the 320-day moving average


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    Tony Venosa, CMT is a Senior Options Strategist and works on the trading desk at Schaeffer’s Investment Research. He joined Schaeffer’s in 2010. He has worked in the finance industry for over 15 years. He began his career as a trading assistant in Chicago on the floor of the Chicago Mercantile Exchange. He later moved upstairs and worked as a commodities broker on both the retail and hedging side. He left the brokerage industry to begin his trading career as a proprietary equities trader at a Chicago firm. In 2000, Tony moved backed to his hometown and continued trading his personal account. He later went on to earn his Chartered Market Technician designation. He earned a B.S. in Finance from Miami University. Tony’s main focus is short-term directional option trading.