CSCO will remain a great short at the $70 level for the next year.
Uh...you might be wrong. No offense intended, but you might.
Forget about the company. Let's look at the chart. Pure TA.
I'm not sure how you are reading the chart, but if you are assuming that the stock will bounce down from around 70 for the next year (a bold statement) please consider:
The all-time high is 82. The down move from there bottomed out at 50. The subsequent move back up has stopped at 70 on three occasions. The "obvious" conclusion would be that the stock is a good short at around 70.
20 divided by 32 is .625. Sound familiar? It's close to 61803, the Fibonacci number. Now, before you poo-poo me, just take a look at that. The recent bottom was 50, the recent top was 70, and the stock retraced back to 57.5.
12.5 divided by 20 is (drum roll)
.625.
This would suggest that the stock is doing something that can be predicted.
Uh...yeah. I know. Yeah, that's kinda how I called the recent bottom. That's how I'm long at an average of 60.50.
Heh heh.
So what's gonna happen?
There's no "range" for the next year. You're dreaming. I don't mean to be blunt, but you are. The stock is going to make a move. The question is...which way?
The long-term trend is up. You want to call the top at 70, but the top isn't at 70, the top is 82. And if the long-term trend is up, then I suggest you look at the weekly chart and see if you can tell what is probably going to happen.
If you short it at 70, you better cover if it breaks through 75, or I guarantee I will take your money at 81 5/8. Nothing personal. Business.
If it breaks down through 56 before it hits 81, you win, and I apologize publicly to you.
Good luck!
TLC |
