Networking giant Cisco Systems (CSCO) has had price gaps lower or higher following its last three earnings reports, and is poised for a price gap higher after the close on Wednesday, Aug. 16.
Cisco has a positive weekly chart, which is a technical backdrop that favors a positive reaction to earnings. When you have price gaps three quarters in a row, the better technical tool is to use Fibonacci Retracement levels on a daily chart.
The daily chart for Cisco covers the retracements from the post-election low of $29.12 set on Dec. 2 to the post-election high of $34.60 set on May 8. The low followed a price-gap lower on Nov. 17 in reaction to earnings. The high followed a price-gap higher on Feb. 16. Both these price gaps were filled, which is a technical rule-of-thumb.
Analysts expect Cisco to report earnings of 55 cents a share after the close on Wed., Aug. 16. Some estimates are 61 cents a share. The bulls look for security and services applications to drive a recovery for the stock.
Cisco is a component of the Dow Jones Industrial Average, and is one of the eight "Dogs of the Dow" for 2017, with a dividend yield of 3.83%.
The Daily Chart for Cisco Systems
Courtesy of MetaStock Xenith
Cisco closed Tuesday at $32.09, up 6.2% year to date and up 10.2% from its post-election low of $29.12 set on Dec. 2. The stock is 7.3% below its post-election high of $34.60 set on May 8.