Cisco Systems Inc. (CSCO) has underperformed in recent years, as the stock did not participate in the technology rally that fueled the 2023-2024 surge in stock prices. However, there appears to be renewed momentum with CSCO shares recently, as illustrated in the above SIA matrix position chart, where CSCO is gradually climbing the ranks within the SIA Dow Jones Industrial Average. Likely feeling the heat from Intel’s removal from the Dow last year, the leadership at Cisco is likely working around the clock to strategize a growth path forward for the $233 billion tech giant. From a technical perspective, the most insightful chart is the SIA point-and-figure chart, presented with a 5% scale to show long-term trading data dating back to 1998. This chart highlights a significant run-up to $51 in 2000, followed by a steep selloff to $5 by 2003. Between 2003 and 2020, the shares made gradual gains, but it took over 20 years to reach the highs seen in 2000. Currently, CSCO shares are just below resistance at $59.93. Advisors will likely be watching closely for a convincing close at the $60 level, which would signal a potential long-term breakout to an all-time high.
The next chart focuses on the short term, with a daily candlestick chart to help analyze recent trading activity and volume. This chart shows a price increase beginning in late August 2024, with resistance just below $60. Although several noteworthy high-volume pulses occurred during this period, the overall picture does not suggest massive accumulation. CSCO holds a near-perfect SMAX score of 9/10, a short-term measure compared to other asset classes, in addition to the 30 Dow stocks that make up the peer group relative strength presented above. A key takeaway from this analysis is setting SIA alerts for a close at $60 on Cisco shares, a value that might signal further advances. Additionally, it’s important to review the company’s fundamental picture. Smart analysts may want to explore changes to CSCO’s strategic position in the computer hardware sector, as these could explain its recent improvement in the SIA relative strength matrix. This is especially relevant if CSCO is to become a market leader and propel its shares to higher levels.
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