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Cisco Systems Inc., The Instrument is in Limbo

2/14/2023 3:26 PM

Shares of Cisco Systems Inc., an American manufacturer and supplier of network equipment for large holdings and telecommunications companies, have entered the main sideways range of 46.88–49.22 (Murrey levels [4/8]–[7/8]) since mid-December, where they are currently trading.

Last week, the price reached the bottom of the channel and resumed growth, but now investors are expecting two events that could significantly affect the movement of the instrument. Thus, January data on US inflation will be released today: if the indicator increases, the US Federal Reserve will be forced to extend the cycle of monetary policy tightening or increase the interest rate hike to 50.0 basis points, which will negatively affect the stock market. If the downward trend in price pressure continues, which most experts expect, shares will continue to strengthen.

On Wednesday, the company's financial statements for the fourth quarter of last year will be published. Experts expect a slight performance improvement compared to the previous period, when revenue rose by 7.0% to 13.6B dollars and earnings per share – by 5.0% to 0.86 dollars. Investors also expect to hear the forecasts of the corporation's management for the rest of the current year and plans for a possible redemption of securities.

The price is testing 47.80 (middle line of Bollinger bands, Fibonacci correction 23.6%, Murrey level [5/8]), consolidation above which will lead to price growth to levels 49.22 (Murrey level [7/8]), 50.00 (Murrey level [8/8]). The key "bearish" level is 46.88 (Murrey level [4/8]). If it is broken, the decline can continue to 46.09 (Murrey level [3/8], Fibonacci correction 38.2%), 45.31 (Murrey level [2 /8]), and 44.53 (Murrey level [1/8], Fibonacci correction 50.0%).

Technical indicators do not give a single signal, reflecting the uncertainty of the market: Bollinger bands are directed downwards, Stochastic – upwards, and the MACD histogram is near the zero line. Its volumes are insignificant.

Resistance levels: 47.80, 49.22, 50.00. | Support levels: 46.88, 46.09, 45.31, 44.53.

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