Tuesday, December 21, 2010

My $118,000 Buy Transaction on Cisco

Cisco is currently trading on the downside range. I believe the recent fall is an opportunity to buy because I believe that based on the range above, Cisco will eventually bounce back and hit the 1st resistance which is at $22.50.

Date Bought: Dec 9, 2010
Price: $19.67
Quantity: 6,000
Reason Bought: After losing more than 20% recently due to the recent announcement of forecast drop in next quarter sales, Cisco now look very attractive. If we look at the early of the year in April, Cisco was trading at the $28 level which is a drop of more than 40% based on the current price of $19. 
All the indicators points to a buy except the MACD histogram which shows a bit of negative side.However, as long as the MACD blue line is above the red line and heading upwards, I am confident of the strength on the recovery of this stock for at least a 10% gain.

I have previously lost 3k trading this share. I sold earlier for a 3k losses in Cisco, because I have transferred my fund to buy Cirrus Logic which have helped me to gain a whopping $15K profit.

Fundamentally,  Cisco is still very strong. The last four quarters of earning are as per below:
Q2 2010 = 0.40
Q3 2010 = 0.42
Q4 2010 = 0.43
Q1 2010 = 0.42

Date Sold: Dec 27, 2010
Price: $20.00
Quantity: 6,000
Reason Sold: I have sold this stock because I think that this stock is not strong enough to further push upward.
Profit/loss: +$2,000
Mistake: I am dead wrong when I think that this stock do not have the strength to push forward. As of today, as of today Feb 2nd, 2011, this stock is now trading at $21.62.
I have purely sold this stock due to my emotional stress from Supervalu as I have transfered some of my capital to Supervalu. The stress from the lost in my Supervalu has caused me to to have the mentality of taking profit in Cisco while I still can. It is obviously a wrong mistake that I have made as Cisco continue to push forward to the $21.00 level and above.
Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence.


  1. I absolutely adore reading your blog posts, the variety of writing is smashing.This blog as usual was educational, I have had to bookmark your site and subscribe to your feed in feed. Your theme looks lovely.Thanks for sharing.
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  2. Cisco has never fully recovered form its huge decline in the wake of the 2000.com crash. So many stocks went sky high because everyone thought we were in a so called new era. Where have we heard that one before. Oh how about the great crash of 1929 or I should say just before the great crash of 1929. Another new era case just more recently was the housing bubble. During the real estate bubble. Nobody ever believed home prices would ever fall let alone go into a serious decline.


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