Cisco Systems, Inc. (NASDAQ:CSCO) Initiated with a Sell Rating

Shares of Cisco Systems, Inc. (NASDAQ:CSCO) have been range-bound for some time, but the shares appear to be poised to establish a lower high in accordance with our technical observations and declines from current levels appear probable.

Importantly, the Earnings Growth rate for CSCO is stabilizing, but the growth rate still remains low in relation to the stock's PE ratio, which in turn makes valuation continue to look rich. 

With high relative valuation levels technical observations come into play and those also tell us that CSCO is near a level of longer term resistance.

When combined these factors influence our decision to initiate CSCO with a sell rating.

Review the Trading Plans:

Technical Summary

Term →Near Mid Long
Bias Neutral Strong Neutral
P1 25.79 20.85 22.13
P2 26.42 23.88 25.18
P3 26.71 26.77 28.05

Long Term Trading Plans for CSCO

February 26, 2016, 1:03 pm ET

The technical Summary and associated Trading Plans for CSCO listed below will help you make important timing decisions for your trades. This data is based on our proprietary analysis for CSCO. In addition we offer Market Timing Models and Stock Filters in the links above which may increase the proficiency of the decisions you make.

CSCO - (Long) Support Plan

Buy over 25.18 target 28.05 stop loss @ 24.92.
The technical summary data tells us to buy CSCO near 25.18 with an upside target of 28.05. This data also tells us to set a stop loss @ 24.92 to protect against excessive loss in case the stock begins to move against the trade. 25.18 is the first level of support below 26.42 , and by rule, any test of support is a buy signal. In this case, support 25.18 is being tested, a buy signal would exist.

CSCO - (Short) Resistance Plan

Short under 28.05 target 25.18 stop loss @ 28.31
The technical summary data is suggesting a short of CSCO as it gets near 28.05 with a downside target of 25.18. We should have a stop loss in place at 28.31 though. 28.05 is the first level of resistance above 26.42, and by rule, any test of resistance is a short signal. In this case, if resistance 28.05 is being tested, a short signal would exist.

CSCO Long Term Analysis

CSCO EPS Analysis

CSCO Dividend Chart

CSCO Revenue chart

CSCO Growth rate - Quarterly

CSCO Growth rate - Yearly

CSCO PE chart

CSCO PEG chart