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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 74.47

+1.9%

Nov 3 3:59 PM EST

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To: The Phoenix who wrote (22146)	2/7/1999 6:45:00 PM
From: Chip Anderson	Read Replies (3) of 77397

Just posted an updated version of my CSCO stock chart on coolhistory.com Too be honest, things don't look too promising technically in the short term. In fact, CSCO _may_ be about 50% through the process of putting in a textbook Head-and-Shoulder's reversal pattern. You can see the left shoulder (#1) and head (#2) on the chart along with the corresponding volume spikes. FWIW, I am usually very skeptical when someone points out H&S patterns on charts because usually what they are pointing to does not have confirming volume spikes at the three major points. True H&S patterns have a huge spike in volume at the left shoulder, another spike at the head, and a third spike at the right shoulder. Unfortunately, so far CSCO has this pattern. If CSCO's next upward bounce starts anywhere near 95 (the base of the pattern I'm pointing out), I'll be very concerned. If the pattern were to hold true to form, after the bounce at 95, the stock would rise to around 110 again (on big volume) and then fall quickly to around 75(!) - which is what you get if you subtract the height of the "head" (115-95=20) from the base (95). What are the odds that this will actually happen? In my experience, only about 20% of the stocks that make it to this point in the pattern actually go on to complete it. I thought I'd point it out now so that people can watch it closely over the next week. As far as the rest of the chart goes, MACD is starting to move lower (bearish) and "On Balance Volume" (which combines price and volume into one indicator) just crossed below its 50-day MA for the first time since mid-November (also bearish). Disclosure: I am long-term long on CSCO. Chip coolhistory.com

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