CSCO shares are trending higher on the 4-hour time frame but there are some signs that the uptrend is weakening. Price has formed lower highs recently, suggesting that buying momentum is starting to fade and that investors might be reducing their holdings ahead of the earnings season in July.
In addition, a head and shoulders pattern appears to be forming, which could mean a potential reversal for CSCO shares. If price breaks below the neckline somewhere around $28/share, price could fall further in the coming months.
For now, the 100 SMA is above the 200 SMA, suggesting that the climb could pick up steam soon. However, the moving averages are treading closer together, hinting at a potential downward crossover and reversal. RSI is on the move down, which reflects selling momentum, while stochastic is nearing the oversold zone.
CSCO Shares Forecast
Bear in mind that Cisco is set to have a new CEO so investors are keen to hear of his plans for the company. As for earnings, CSCO shares are currently on a buy rating among stock analysts who are expecting the company to print strong figures for Q2.
Analysts at Sanford C. Bernstein reiterated an outperform rating and set a $34.00 price target on shares of Cisco Systems in a research note on Thursday. Analysts at MKM Partners reiterated a neutral rating and set a $32.00 price target on shares of Cisco Systems in a research note on Friday, June 12th. Finally, analysts at Morgan Stanley set a $30.00 price target on shares of Cisco Systems and gave the company a buy rating in a research note on Wednesday, June 10th.
In their Q1 earnings report, the network equipment provider reported $0.54 EPS for the quarter, beating the Thomson Reuters consensus estimate of $0.53 by $0.01. The company had revenue of $12.14 billion for the quarter, compared to the consensus estimate of $12.07 billion.
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