CSCO Rallies As We Anticipated After Earnings Release
by Mike Paulenoff
February 20, 2023 • 11:21 AM EST
During earnings season, Mike Paulenoff scours his chart work for setups that might provide technical "hints" to MPTrader members regarding the probable directional market reaction to a particular company's quarterly report.
Last Wednesday afternoon (Feb 15), prior to the company's earnings report, Mike posted his setup work on CSCO, noting:
"CSCO reports earnings after the close. Based on the setup exhibited by my attached 4-Hour Chart, I am interpreting the 2-1/2 month sideways Coil formation as a bullish digestion period and pattern atop the upleg off of the October low at 38.61, which if proven accurate, argues for an upside reaction to earnings that propels CSCO above the December high at 50.46 toward target zones at 55-57 and possibly 59-61. In the event of a negative reaction, a sustained break of 46.50 will leave CSCO vulnerable to a press into the 42-43 support area... Last is 48.35."
As it turned out, CSCO beat The Street's expectations on earnings, revenues, and visibility, which triggered a powerful positive reaction from the 4 PM ET close at 48.52 to a post-market spike high at 53.60 (see Mike's chart below), an initial thrust of 10.5%.
Although CSCO gyrated into a two-way trade after the initial 10.5% reaction that circled 50-51 into Friday's close at 50.77, the stock ended the week 5% above where it was trading when Mike initially provided the "directional pre-earnings setup hints" to MPTrader members.
What is next for CSCO? Will the stock revisit and take out its post-earnings high, or alternatively, was 53.60 an upside exhaustion spike? Mike will be watching the price behavior of CSCO closely for its next and likely technical direction, as well as other names impacted by earnings next week, such as WMT, HD, NVDA, and MRNA.
Login this week and join Mike and our members for their constant intraday discussions and analysis of individual stocks, ETFs, macro indices, commodities, precious metals miners, and Bitcoin.
On April 5, Mike Paulenoff discussed the following with MPTrader members about the significant negative behavior of the equity indices in general and the SPY (SP 500 Equity Index ETF), writing:"... Yesterday's nosedive in the price action left behind a Bearish Engulfing Candle in SPY, SPX, ES, et al... My attached Big Picture Chart of SPY shows the powerful, relentless Oct-Apr. advance from 409.21 to 526.
On March 13, amid a broad discussion about the emerging bull phase developing in the precious metals and miners, Mike Paulenoff posted this about WPM (Wheaton Precious Metals) to our MPTrader discussion room:From a more Silver-Gold perspective (if FCX is perceived to be Copper-centric), let's notice that WPM strength is pushing up against its near-term resistance line in the vicinity of 45.
Right after the opening bell on the morning of October 20, 2023, Mike Paulenoff posted the following GLD (SPDR Gold Trust) commentary to our MPTrader Discussion Room:"For all of the long-suffering Gold Bugs... As we speak, GLD is attempting to take out key 5-month resistance lodged between 181.20 and 184.40, which if successful and sustained, will point GLD to 188-190 next... Last is 183.88...
During the afternoon session of February 15, this is what Mike Paulenoff posted to the MPTrader Discussion Room about the technical setup in the oil service company SLB (Schlumberger):"This name in the oil service sector exhibits a well-demarcated 4-year bullish channel with the SLB price structure upturning off of the lower boundary line in the vicinity of 47.00 (the 2/13/24 low) amid a glaring double non-confirmation of the weakness into the lower channel line.
On December 26, 2023, fellow MPTrader member FJB asked me the following question: Mike - do you feel comfortable giving some of your top sectors for next year if you have any? This was my response:In order of preference based on my technical setup work:1- XLV (Healthcare)2- XLB (Materials)3- XLE (Energy)4- XLI (Industrials)5- XLF (Financials)As of the close this past Friday, 3/15/24, YTD results showed XLV +6.58%, XLB +6.15%, XLI +7.06%, XLF +8.54%, and XLE (Energy) leading all sectors, at +9.27%.