Monday, October 09, 2006

Technical Trade Idea - Cisco Systems, Inc. (Public, NASDAQ:CSCO)

Click on chart to enlarge - Timeframe - monthly

After carving out a multi-year base, CSCO is currently testing resistance at $24.13, dating back to May 2001. A successful break could see price run up to $29.37 resistance (Jan. 2004).

Here is an excerpt of Barron's coverage this weekend.

Barron's reports as sales and profits for Cisco (CSCO) begin to flow from new customers and new markets, like Internet video, Wall Street is likely to raise its price targets. A number of analysts think shares could easily tack on another 15%....To beguile enterprise customers with the virtues of video, Cisco soon will unveil a sophisticated high-def video-conferencing system. Companies such as Polycom (PLCM), Radvision (RVSN) and Norway's Tandberg have been selling videoconferencing products for years, but Cisco could quickly become the market leader. Cisco will roll out this telepresence product to is 70 sales offices next year, and estimates that it will break even on the investment in less than nine months. It expects to save an annualized $100 mln in travel expenses by year-end 2007. Cisco also is seeing growth of nearly 50% a year in its sale of networking systems in emerging markets like Saudi Arabia. That growth results from sales investments Cisco made in the past couple of years, just as it had done previously in India and China.

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