Cisco's Strength

Cisco (CSCO) has been trading with relative strength of late. Traders seem to be perking up to this. A couple opined that perhaps CSCO is about to break its year long downtrend.

Chartgazing suggests that we're still a buck away from such an event. The downtrend line and the 50 day moving average are tracking almost exactly right now.

Am currently carrying a pretty sizable CSCO position. In past posts I have laid out the fundamental and valuation thesis that has made me bullish. The last couple of months, however, have brought me visions of 2008, where even stocks of good value are likely to be sold if we encounter a broad deleveraging event. I assign the chances of this scenario as pretty good over the next few months.

As such, I plan to lighten my CSCO position into strength. Should CSCO approach that $17.50ish area, I'll be making significant sales.

position in CSCO