Short term outlook on CSCO - EW analysis
Updated
On friday january 20 I posted an idee in the German version of Tradingview calling for a bottom in CSCO. Since then CSCO rallied in two distinct upward waves, which I would identify as a double 1 - 2.
If you look at a seasonal chart of CSCO it suggests another trough around january 30 - 31 before further rally up until may. If the rally from january 25 is an impulse wave, then the target would be around 48 USD, the low of the preceding wave 4 of one lesser degree.
In a more bearish scenario the whole advance from january 24 could be labeled as an overshooting wave b or x. In that case the correction could extend into the area of 47 - 47,5 USD.
So CSCO is up for further declines on monday and probably into early tuesday. In late trading on tuesday we might already see a turnaround leading us into a wave 3 rally.
If you look at a seasonal chart of CSCO it suggests another trough around january 30 - 31 before further rally up until may. If the rally from january 25 is an impulse wave, then the target would be around 48 USD, the low of the preceding wave 4 of one lesser degree.
In a more bearish scenario the whole advance from january 24 could be labeled as an overshooting wave b or x. In that case the correction could extend into the area of 47 - 47,5 USD.
So CSCO is up for further declines on monday and probably into early tuesday. In late trading on tuesday we might already see a turnaround leading us into a wave 3 rally.
Note
CSCO looks very strong. Wave 2 was quite weak and only managed to eke out 48,12 USD. If this was all of wave 2, we should see rapid gains into wave 3 of 3. Wave 3 will probably reach at least the 1.618 expansion of wave 1 of the extension at about 57 USD. Considering seasonality the 57 target could be reached by late April. After that a wave 4 correction till july should be in order.Note
This analysis calls for an update. Unfortunately the last correction was quite deep. This leaves us with two opportuneties. My prefered idea is a running wave 2 that ended on thursday at 46.43 USD. CSCO would then be on the springboard to start wave 3 and rise with the general market (my expectation for DJIA and NDX).
Alternatively the low reached on january 20 was just wave W of a more complex correction. The high at 49.56 USD rechaed on february 2 would then be a wave X.
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