Cisco's Chart Springs to Life With This Key Indicator

Cisco Systems CSCO was trading higher ahead of the opening bell in the U.S. on Monday morning, after analyst Matthew Niknam at Deutsche Bank upgraded the stock. Niknam, who is rated at slightly better than three stars out of five by TipRanks, increased his rating from "hold" to "buy" and raised his target price for the shares from $65 to $73. Back in February, Niknam increased that target price from $57 to $65, so his opinion on the stock has been steadily improving for months now.

This upgrade, according to the analyst, is supported by three key points. First, Niknam sees AI-driven tailwinds, improved scale in security and better competitive dynamics in networking as drivers for growth in coming years. Second, Niknam views an improved revenue mix driven by subscription services as a means toward a resulting stabilization in margin. Third, Niknam likes the stock's valuation -- at 15-times forward looking earnings -- relative to the broader S&P 500.

Last week, Amit Daryanani of Evercore ISI and Atif Malik of Citigroup both reiterated "buy" ratings, while Daryanani set a $72 target price and Malik set a $71 target price. Both are rated at five stars at TipRanks.

Cisco Live

Cisco Systems held the firm's Cisco Live 2025 event in San Diego, California. The event lasted from Monday through Friday and that's what drove these recent opinions that have been expressed across the community of sell-side analysts. The company has announced a number of innovations over those three days, such as a Hybrid Mesh Firewall and Zero-Trust Network Access, which is a service that simplifies policy management for clients as well as enhances visibility and scale while not adding complexity to their security stack. The firm also announced the increased integration of the acquired Splunk platform to unify data across all of the firm's services, which helps security teams automate workflows and respond more quickly to perceived threats.

So, What Now?​

Readers will see a Double-Top pattern of bearish reversal. ​This pattern would have a downside pivot of $52, which is the nadir in between the two peaks. 

Relative Strength is still better than neutral, but the Moving Average Convergence Divergence is starting to get wobbly. The histogram of the 9-day Exponential Moving Average has fallen into negative territory, while the 12-day EMA fell below the 26-day EMA on Friday. That, however, could change this morning.

Another Way to Look at This....​

All I did was remove the Double Top ​pattern from my vision. Now, it's easier to see this Cup with Handle pattern with a $66 pivot. 

Unfortunately ... pivots are like saloon doors that can swing both ways. They can act as a slingshot and accelerate the move. They can also act as resistance and stop a move like a goal line stand. That's what happened here about a week ago. So, game over?

Not exactly. The stock was rescued as it was sold off, by swing traders among others who made a stand at its 21-day exponential moving average. The stock is now trying to rally this morning. Does that give the cup-with-handle pattern new life? It sure does. Nothing is broken as long as the key moving averages hold. The pivot sets up a target of roughly $76 in my opinion if it can be taken and held. If the pivot holds on this next attempt, which would be a second failure, we revert to the double top.

Unless of course an Ascending Triangle forms. Isn't technical analysis grand? To make things simple, I see this chart as bullish for now, and think a profit of 15% plus is possible.

At the time of publication, Guilfoyle had no position in any security mentioned.