CSCO has gained 89% since its 2009 lows. Weekly chart of CSCO displays an oversold stochastic, expect price to correct a bit in the short term. Average Volume associated with price declines have been lower compared to price advances, this is a positive accumulation signal. CSCO is above its 200 and 50 day moving averages. 50 day MA is expected to crossover 200 day MA, which will be positive for the stock price.
Although, Communication Equipment Industry is not in our top ranked industries, we believe CSCO will benefit from improved macroeconomic forecast for 2010. Corporate earnings are expected to improve globally, which will result in fresh investment in technology; CSCO is expected to catch this wave with its new improved product offerings.
CSCO is expected to post 10% sales increase in 2010, and with the new CRS-3, CISCO is expected to grow at 12% in 2011 and going forward. btw, On 3/9/10 CSCO announced its next-generation CRS-3 Core Router. Cisco claims that the CRS-3 can support 12x the traffic of the nearest competing system while consuming 60% less power. Seamless migration from the CRS-1 to the CRS-3 is also possible.
One concerning aspect is, that the trailing twelve months earnings at CSCO declined at a greater rate than revenues. However, the average company in the Communications Equipment industry also saw falling earnings albeit at a slower rate than CSCO
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