04/14/00 Cisco Systems (CSCO)
Points to watch:
Cisco fell 3.87 on Thursday to close at
61.13, just above the support provided by the 2/22/00 intraday low of
60.63.
The stock has broken several important
supports over the past two days. On Wednesday the stock closed below
its 55 day moving average for the first tome since crossing above it last
October. On a previous test of the 55-day in late January, the stock
rebounded off the average and set off on a 2-month run to new highs.
On Thursday the stock failed to hold its April 4th intraday low of 64, and
also failed to hold the support provided by the 3/16 low of 62.15--a level
that represents the 62% retracement of the stocks 1/31-3/27 leg up.
Long and short term technicals continue
to weaken: daily RSI and stochastics have flashed a warning sign by
falling below 65 from overbought, weekly RSI is moving lower and showed
negative divergence at the 3/27 all-time high, and both daily and weekly
OBV have turned down.
If the stock fails to hold support at
60.63, a quick trip to support at 57.3 (the 50% retracement of its
October-March rally) is likely, with a test of the 62% retracement of the
10/99-3/99 rally at 51.5 the next target if this support fails to hold.
Despite the stock's recent selloff, it
remains overextended above its 200 day moving average at 47.1, and a test
of the 47-51 range is likely before the stock bottoms.
