When you think of Cisco Systems, Inc. (CSCO), you associate the company with hardware — networking, routers, and security. However, its investment in artificial intelligence (AI) makes it a stock worth monitoring.
President Donald Trump’s announcement of the Stargate project — up to $500 billion investment to build cutting-edge AI infrastructure — is helping companies with a significant investment in AI. One stock that shouldn’t be ignored is CSCO. It may not be part of the Stargate joint venture or the first stock that comes to mind when thinking about AI, but it’s got legs.
We have covered CSCO stock in past blog articles, but with its recent price action, the stock deserves another look. CSCO’s stock price has been hitting new all-time highs of late; you likely have seen CSCO regularly appear in the New Highs dashboard panel under the ATH category. And given that CSCO’s stock price is under $100, it’s an investment to consider.
FIGURE 1. CISCO SYSTEMS’ STOCK KEEPS HITTING NEW ALL-TIME HIGHS. It’s worth pulling up a chart of CSCO’s stock price and observing its price action.Image source: StockCharts.com. For educational purposes.
A Deep Dive Into CSCO Stock
The weekly chart of CSCO (see chart below) shows that the uptrend is still in play.
FIGURE 2. WEEKLY CHART OF CSCO STOCK. The longer-term uptrend is still in play, indicating the rally has legs.Chart source: StockCharts.com. For educational purposes.
- The StockChartsTechnical Rank (SCTR) score is at around 80.
- The stock price has mostly remained above its five-week exponential moving average (EMA).
- Its relative strength index (RSI) is just above 70.
The daily chart of CSCO also confirms the positive trend.
FIGURE 3. DAILY CHART OF CSCO STOCK. After pulling back to its 50-day SMA, CSCO’s stock price reversed, paused, and is now back to rallying higher.Chart source: StockCharts.com. For educational purposes.
Between December 17 and December 23, CSCO’s stock price dipped below its 21-day EMA and found support at its 50-day simple moving average. After that, it climbed higher and stalled for several days — between December 30 to January 13. From January 14, the stock started climbing higher.
- CSCO’s performance relative to the S&P 500 ($SPX) is declining slightly. This isn’t surprising given the Nasdaq’s recent rise.
- The full stochastic oscillator in the lowest panel is above 80, putting it just into overbought territory. Remember, the oscillator can remain in overbought territory for an extended period.
Your Game Plan
CSCO’s stock price may be losing a little momentum since volume looks like it’s declining. If you didn’t take advantage of the opportunity to open a long position in CSCO, you may have another chance. The stock could dip back to its 21-day EMA. If it does and reverses with follow-through, it would be another opportunity to pick up some shares.
The bottom line: Add CSCO to your ChartList and set an alert to notify you when the stock price hits its 21-day EMA (alert provided below). Note: You can modify the scan with a different closing condition instead of the 21-day EMA.
Cisco Systems announces quarterly earnings on February 12 (see our Earnings Calendar). Volatility in the stock price could increase as earnings day approaches.
Set Alert
[symbol = ‘CSCO’]
and [close = EMA(21, close)]
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.