Stock of the day: Cisco
11 June 2024
In today's stock of the day, let's delve into Cisco, which is currently at a pivotal support level and showing potential for a bullish reversal. Cisco has been in a downtrend since September 2023. Recently, it has been testing a crucial horizontal support at 45.7, highlighted in orange. This support was first touched at the end of May, triggering an upswing. Yesterday, the price formed a hammer candle, marked in blue, on this support. A hammer candle on such an important support can indicate a promising buy signal, at least in the short to mid-term
The technical setup is interesting. The repeated testing of the 45.7 support suggests that buyers are stepping in to defend this level. The formation of a hammer candle, a bullish reversal pattern, reinforces the likelihood of a potential upswing. Historically, hammer candles on key support levels have preceded significant upward movements, adding weight to this technical signal. Traders often look for such patterns as they suggest that the selling pressure is subsiding and buying interest is picking up.
Looking forward, as long as Cisco's price remains above the 45.7 support, the sentiment remains positive. This area is now a critical pivot point; a sustained move above it could lead to a further rise. Conversely, if the price falls below this support, it could signal continued weakness. However, the current indicators suggest that the bulls have the upper hand, making it a potentially attractive entry point for traders betting on a reversal.