Shares can transfer quick, just like the velocity of an arrow flying by the air. And for those who do not monitor your charts, you possibly can simply miss a buying and selling alternative.

Final week, I wrote about CSCO inventory, one of many shares filtered in my StockCharts Technical Rank (SCTR) scan. On the time, I used to be ready for CSCO’s inventory worth to drag again to its 21-day exponential shifting common (EMA). Properly, it occurred quite a bit faster than I anticipated.

It is good that I’m going by all my ChartLists each buying and selling day. The pullback additionally coincided with the upward-sloping trendline. It was accompanied by declining relative efficiency in opposition to the Nasdaq Composite ($COMPQ) and a decline within the worth of the full stochastic oscillator.

Is that this a traditional buy-the-dip second? To reply the query, let’s take a look at the every day chart of CSCO.

FIGURE 1. DAILY CHART OF CSCO STOCK. The uptrend remains to be in play, making the pullback to the 21-day EMA a lovely entry level.Chart supply: StockCharts.com. For academic functions.

The uptrend broke barely to the draw back, however the help from the 21-day EMA was sturdy. Thursday’s worth motion indicated a reversal is feasible.

The stochastic oscillator is approaching the 50 degree and is beginning to flip larger. The final two instances CSCO’s inventory worth pulled again to the 21-day EMA, the oscillator turned up at across the 50 degree. I will be watching to see if an analogous situation unfolds this time.

CSCO’s worth motion seems enticing. I am able to open a protracted commerce in CSCO when the %Okay line crosses over the %D within the stochastic oscillator. CSCO’s inventory worth hit an all-time excessive in early December, so a pullback is a first-rate time to open a protracted place if all of your standards are met.

The Sport Plan

Cisco Methods might not be a direct AI play, however it’s a networking firm, and the inventory may gain advantage from tech firms’ elevated AI spending. So it is not too far-fetched to anticipate CSCO’s inventory worth to journey together with the AI wave.

Thursday’s worth motion doesn’t but affirm a bullish upswing, however I am going to watch this chart carefully. It is a chance I do not need to miss.

Even when it seems like a near-perfect setup to purchase on the dip, there’s nonetheless an opportunity the commerce might go in opposition to me. If I enter a place at round $59 and the commerce goes south, the 50-day SMA could be my most cease loss.

Disclaimer: This weblog is for academic functions solely and shouldn’t be construed as monetary recommendation. The concepts and techniques ought to by no means be used with out first assessing your personal private and monetary scenario, or with out consulting a monetary skilled.