Cisco ($CSCO) Â continues to trend down with gaps in between.
Since my last post in May, CSCO has fail to hold on and has go lower towards the $15 range.
News is out now that CSCO will cut as many as up to 10,000.
CSCO job cuts highlight the possibility of slow growth ahead due to economic activities and its internal innovation/transformation.
I believe, CSCO will hit $12.50 by Q1, 2012 (or maybe even earlier).
Reuters just reported that Cisco (CSCO) will have a sales miss for this quarter with more jobs cuts expected.
The key points to note for Cisco is as follows:
1. Cisco’s core businesses is UNDER THREAT.
- On the low end, competitors comes in the form of Netgear (NTGR), despite the fact that it owns Linksys.
- On the high end, there’s Huawei from China.
In other words, there is very little room for growth in its traditional stronghold.
2. Transitional Period
Much has been said about its transition. While Cisco is pretty much cash rich, with little debt, there is no guaranteed that the transition will see light.
Just not too long ago, the newly acquired FLIP was dumped.
Traditionally, Cisco is used to selling hardware (routers, switches etc). The transition may mean more services and that does requires a change in approach.
3. Ichimoku Chart for CISCO (CSCO)
Nonetheless, we can see from the Ichimoku chart above, CSCO has at least 4 gap down May 2010 when it break the kumo support.
The trend is clearly bearish. With more cost cutting expected, I won’t be surprised if it can touch $15 or even $12 if the overall market turns bad.
There are times when I am right and there time times when I am wrong.
Garmin is one of those. I was looking for a short entry it as it consolidates over the few days with a possible resistance level at around $28.50 to $29
My trade plan is to enter if it breaks the support as identified on the chart at around $28.
The saving grace for me is, the setup did not materialise.
Garmin was up yesterday on the open and went on to break resistance and surge higher.
If there’s a lesson for this trade that did not materialise, it will be :
No Setup. No Trade