I see Cisco Systems (CSCO) beat estimates tonight so I thought I would give the long term chart a look. The first thing I saw was that price remains well below the high over $80 in 2000. Looking at the 2002-2007 range square a definite time cycle pops out. The first peak in 2004 hit at the 25% of the time cycle. The 50% and 75% points of the time cycle also provided a low for at least a short time.
Chart courtesy of Stockcharts.com
Price made an A-B-C correction from the 2007 high. The “C” low was at the 1/8 time cycle. There is no guarantee that price has completed the correction and could eventually go down for five waves. Since earnings were good today and the market may be ready to move up, it is a good time to watch and judge CSCO’s price action. Price is already overlapping wave 2 so my guess is for the three wave versus the possible five wave formation. The recent low is an obvious place to cut losses if going long this formation and it fails.
Tags: A-B-C Correction · CSCO · Elliott Wave Analysis · Square of Range2 Comments
2 responses so far ↓
Looks like a potential head and shoulders
left shoulder Jan 07
head October 07
right shoulder June 08
A drop of three points would break the neckline and put a target of near 10 for CSCO
Fred - yes the H-n-S is there. I’ve found few of these ever break down/up. But if they do then your target is most likely where it will go.