What Now for Cisco?

 I have traded Cisco stock for several times now. I have made some money and lost some on this stock. For those who are invested in this stock, I hope that my brief analysis in this post will be able to help you in your decision making on whether to buy more or take profit for this stock.

Cisco has been moving upward aggresively since Aug 2011 at around $14 to the current level of $20. It is a whopping 40% gain. To me it is a huge gain and profit taking, long covering and consolidation for this stock look inevitable.
Based on the long term chart, Cisco has broken the downward range trading and is now going into a smooth uptrend move. I believe this uptrend move might be a long term one, however, a meaningful consolidation for this stock is a must for this stock to continue its uptrend strongly.

Based on the short term chart, it appears that Cisco is moving into a consolidation move with the short term target at $17.20. I believe the $17.20 is a strong support level for Cisco and one should plan an entry at this level if you are interested to go into this stock.
My target for Cisco at $17.20 is well supported by 2 important technical indicators which is the MACD and Stochastic, both are currently showing an overbought position for Cisco and both indicators are showing the blue line is moving downward to consolidate.

Based on the earning analysis for Cisco, it looks great in both quarterly and yearly growth. With the EPS of $1.77 for 2012, Csco is currently trading at slight above the PE ratio of 10. It is a very good PE ratio for a stable and a slow but strong revenue growth company.

Even though the earning growth for Cisco is a slow one, but it is a good fundamental company to invest in for a long run especially with the hugh cash in hand.

Disclosure:
I have no positions in Cisco and do not intend to trade Cisco in the coming future as I am currently show hand in Melco Crown (MPEL).

My Previous Lost on Cisco Trade

I have previously bought Cisco on Nov, 2011 and lost $3,300 on this trade. I have forgotten to record it  under my Chronicle of Investment, and therefore, I am going to blog about it and to post the losses back in my Chronicle of Investment section.

The reason is maintain the honesty to my all my readers and also to keep a detail track record of my investment regardless whether it is a small lost or a big lost.

Date Bought: Nov 15, 2010

Price: $ 20.12

Quantity: 5,400

Reason Bought: I thought this stock is oversold and the downside to this stock is minimum at this level.

Mistake: I should have waited a bit longer for the selling to subside before jumping into it. It is very obvious that the selling is still ongoing as the volume is still very high. Moreover, both the MACD and Stochastic do not show a buy signal yet. It is a very careless mistake that I have made.

Date Sold: Nov 17, 2010

Price: $19.51

Quantity: 5,400

Reason Sold: The reason I sold is because my head is not thinking right. I am afraid that it will go down further. Although it does go down further to around $19, it eventually rebound to the current level of $21.50 and above.

Lesson to be learned: I should have more confidence on myself and the decision that I have made. If I think that Cisco is a good stock and it is good for the long term, I should have hold on to it until I start to make good money.

Profit Lost: -$ 3,300

What Now for Supervalu? Buy, Hold or Sell?

 

I have invested half of my capital in this stock at $9.16. So after more than a week, the big question is what now? Will the stock continue to go up from here after a small gain to $9.26 or will Supervalu continue its downward trend? Is Supervalu is really super value now? Well, I hope my technical analysis skill that I have acquired for more than 10 years will help me answer this question. 

I will not analyze this stock based on A-E section that I have indicated on the above chart.

A- Based on the candlestick indicator, it is currently showing a positive outlook. I believe that within 2-3 days more, this stock will shot up with at least a 3% gain.

B- After a small climb from the $8.80 level, the stock now is consolidating at the $9.20 level. The decreasing in volume show that after this small run up, the selling has been well absorbed for the next upward surge. It shows that they are no more selling or has been reduced an the operators is slowly and quietly accumulating the stock for the next upward surge.

C- The MACD histogram show a slight negative indication because the last bar is red, therefore, it is not a good sign. However, I believe that this is only a very small indication on the downside which does carry any weight.

D- As per the MACD line, the blue line is still very much on top of the red line, as long as the blue line is on top putting pressure on the red line, I can definitely sleep well at night and hold on to my darling - Supervalu.

E- Stochastic indicator is now showing a 50-50 indication on whether this stock will move up or down. The blue line is currently touching the red line and it is quite worrying for me actually. Stochastic indicator is a powerful indicator to detect the shift of trend line. I rely on this indicator quite often. As for the current status, I don't have a clue what will happen cause it is currently at the 50-50 cross road.

Based on the above analysis, I am very confidence that Supervalu will continue its upward move within these few days. However, if I am wrong, I will not hesitate to chop off this stock from my portfolio at once. Even thought I believe that the percentage gain for this stock can be 3-4 times more than fundamental stock like Cisco, Supervalu is still a risky stock with very high debt. Therefore, this is a stock that I will take immediate action once I think it is failing me.

As for Cisco, which I have parked my other half of my capital in this stock, I will continue to hold until I have realize at least a 10% gain, no matter what the short term move for this stock is.

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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. 

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.
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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.

Don't Sleep on Cisco!

After Missing The Latest Quarter, Cisco Shares Are Dirt Cheap

filed in technology, telecommunications on Nov.30, 2010

There is no doubt that earnings season is my favorite time of year from an investing perspective. Every quarter Wall Street overreacts to dozens of seemingly disappointing profit reports and punishes stocks in the process. For a deep value, contrarian investor like myself, it’s Christmas, Hanukkah, and Kwanzaa all wrapped into one. One of this month’s best holiday doorbusters has to be networking giant Cisco Systems (CSCO), whose shares have fallen 20%, from $24 to $19, after the company guided down for the current quarter.

Now, I understand that investors hate quarterly misses, especially for larger companies like Cisco whose businesses typically have far more visibility than smaller upstarts. That said, Cisco’s current valuation (12x trailing earnings, 7x trailing cash flow, and 11x 2011 profit estimates) makes it seem like this company is barely growing at the rate of GDP. That does characterize some mature tech forms such as IBM (IBM), which only grows sales at 3%-4% and also fetches about 11 times earnings.
Despite recent softening in some of their businesses (especially sales to governments), Cisco is still growing sales and earnings at double digit rates and should continue to do so. This is a classic case of getting to buy a company that is growing faster than the S&P 500 at a discount to the market’s overall valuation. Not to mention that Cisco is a leading company in an excellent and highly profitable industry. I would be quite surprised if Cisco shares didn’t reclaim all of the recent losses sometime over the next 12-18 months.
Full Disclosure: Peridot Capital was long shares of both Cisco and IBM at the time of writing, though positions may change at any time.

From: http://www.peridotcapitalist.com

Cisco will Continue to Outperform.

I believe now is good time to buy Cisco because it is the best Christmas deal available either fundamentally or technically.

As per the circle that I have drawn in the picture above, all the circles indicated positive sign which I believe will take the stock higher.

My 1st target that I am very sure it will hit is at $21 within weeks. The second target is at $24 within months.

The chances of the stock reversing to the downside is there, however, my analysis and experience tell me that the odd is that Cisco will move higher from here. I believe all the selling has been well absorbed and the buyer is waiting at the sideline to push the stock higher.

Moreover, Cisco is a good fundamental stocks and the company announce that they will start issuing dividend next year. I believe that when Cisco eventually distribute the dividend, it will become a darling stock again.

Lets us all pray that the stock go higher as I have bought a large amount at $19.67 level.
Below are the latest upgrade from Oppenheimer:

Cisco: Oppenheimer Says Buy, The Worst Baked In

By Tiernan Ray

Shares of Cisco Systems (CSCO) are up 29 cents, or 1.5%, at $19.36 after Oppenheimer & Co.’s Ittai Kidron this morning raised his rating on the stock to Outperform with a $23 price target, writing that sentiment is so bad on the company, it’s a good time to consider owning the shares.
Kidron cut his estimate for the fiscal year ending next July to $43.1 billion from a prior $44.2 billion, below Street consensus of $43.67 billion. His EPS estimate, at $1.60, is down from a prior $1.67 and below the Street’s $1.61.
Those numbers “appropriately reflect concerns of share losses and maring pressure,” writes Kidron. Though things could be “bumpy” for the stock, Kidron argues his reduced view, and the negative sentiment on the company, both capture the prospect of further erosion by competitors.
Kidron’s gone through the product line, trimming estimates in areas such as the set top box business (housing woes), while taking a bullish view of things such as the Unified Compute Server, the core of Cisco’s push into data center computing. He notes that that business is on a half-a-billion-dollar run rate, as of the first quarter of this fiscal year, with 2,800 customers.

Analysis for 100% Gain Stock Part 2

I have bought this stock CSCO at the price of $19.67, although the current price is $19.22, do I feel scare or regret? Not at all, instead I feel great and I believe that at least 10% gain for this stock is unavoidable.

The reason:
1) The MACD histogram shown that the blue line is very close to touch the red line and is almost crossing over with a nice curving up.
2) As for the Stochastic it the blue line and the red line have already met for some time and the blue line is waiting eagerly at the side to cross over.

I believe the time is ripe for CSCO to gain back at least 10% or more to cover the gap. All technical indicators is pointing to a buy.

I do not ask you all to buy, however, please check back to prove that I am correct and also that I will make at least 10% can in 7 days.
10% = $10,000
Stay tune.

100% Profit for This Stock?

So is there such thing as 100% gain on investing in share market? Yes, based on my believe, there is. I have recently follow Cisco and I think the time is ripe for Cisco to rebound after the huge sell off recently. I have bought this shaare at $19.67 recently now I am waiting for at least a 10% gain for this stock. According to my analysis, the strong support will be at the $19 level which I found it hard to be penetrated. For the immediate short term, I think the share will go up to close the gap which is at $24.

Technically:
1) The stochastic is showing that the blue line and met the red line and is about to cross over. It is more convincing when both the line is way at the bottom below the 20% level.
2) As per the RSI, it shows that the RSI is oversold at below the 30% level.
3) As per the MACD, you can see that the blue line is nicely rounding up to go above the red line. I believe when both the line meet, the share will be already up at least 5%.

Fundamentally:
1) It is cash machine with stable income coming in. Although the next quarter forecast is below the analyst forecast, I believe over the long term, it will definetely meet or exceed the analyst target.
2) Also, the company announce that they will start to pay dividend of 1%-2% starting next year.
3) The best is recently the company has announced a $10 billion share buy back program.

With this analysis that I have conservatively done, I believe a 10% gain for the immediate term is very highly possible.

I am confident because my previously analysis on Dryships have proven to be accurate and I have of course make some money from it.

I believe this round, I will show hand and win again with a accuracy of 100%.

To be more convinced on my analysis, kindly refer to the below article that I have found and read:

Cisco Adds $10 Billion to Its Stock Buyback Program

By Nick Turner - Nov 20, 2010 5:16 AM GMT+0800

Cisco Systems Inc., the largest maker of networking equipment, added as much as $10 billion to its stock repurchase program, aiming to give a boost to investors after the shares fell 17 percent last week.
“Today’s decision to increase Cisco’s stock repurchase program is part of our continued commitment to return cash to shareholders,” Chief Financial Officer Frank Calderoni said yesterday in a statement. “We are confident in our strategy, product portfolio and ability to capture and lead new markets.”
The company’s board had already authorized as much as $72 billion in stock buybacks. And in September, Chief Executive Officer John Chambers announced Cisco would issue the first dividend in the company’s history, providing another reward to investors. Cisco is looking at a dividend yield of 1 percent to 2 percent, he said at the time.
Cisco’s shares plunged 16 percent on Nov. 11, the biggest one-day drop in more than 12 years, after the company’s profit and sales forecast fell short of analysts’ estimates. Revenue in the fiscal second quarter will be about $10.1 billion to $10.3 billion, San Jose, California-based Cisco indicated on a conference call.
Excluding some costs, earnings will be 35 cents a share at most. Analysts projected sales of $11.1 billion and profit of 42 cents on average, according to estimates compiled by Bloomberg.
‘Short-Term Bump’
The company faced a “challenging economic environment” last quarter, Chambers said. He blamed the slump on lower government spending in developed countries and market-share losses to rivals such as Motorola Inc. Competition also has forced Cisco to cut prices on some products and seek acquisitions to maintain growth.
“I never want to let down our shareholders, even if I believe it’s a short-term bump,” Chambers said in an interview at the time. “I like for the stock to go up all the time. Obviously, we’ve got to get confidence back.”
Cisco was unchanged at $19.61 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have dropped 18 percent this year. The company had almost $39 billion in cash and short- term investments at the end of October.