Now looks like a solid opportunity to bet on CSCO's next move with options
The shares of Cisco Systems Inc (NASDAQ:CSCO) suffered a mid-September bear gap on the charts, moving below the $54 level after touching a roughly 18-month high of $58.19 on Sept. 1. After falling in four of the last seven weeks, CSCO is down 2.8% over the last month. Last seen up 1.2% at $54.41, however, Cisco Systems stock is flashing a bullish signal that could help it recover from these recent losses.
Digging deeper, Cisco Systems stock recently came within one standard deviation of its 80-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, comparable moves occurred six times in the past three years, with CSCO enjoying a positive one-month return 80% of the time, averaging a 6.4% rise. A similar move from its current perch would put the equity just shy of the $58 mark.
An unwinding of pessimism in the options pits could blow additional tailwinds for CSCO. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day put/call volume ratio stands higher than 95% of readings from the past year. This indicates long puts have been getting picked up at much faster-than-usual clip.
A shift in analysts' sentiment could also bode well for Cisco Systems stock. While eight in coverage call the equity a "buy" or better, 11 maintain a "hold" or worse rating.