Cisco Slips and Could Keep Falling

Cisco Systems (CSCO) is struggling today. The stock began the session with a gap lower open and has been under pressure since the bell despite the healthy gains in the Dow. The stock was off more than 2% to $20.34 heading in the final hour of trading and will attract above-average trade in the process. Shares are testing the May lows here but support may not hold. CSCO appears headed lower in the near term.

Cisco (CSCO) Source: TradeStation View Chart » View in New Window »

Unlike the Dow 30, Cisco is working on its second straight lower monthly high. The stock has been drifting lower since hitting a wall near $22 in early March. CSCO eventually left behind a weekly double-top before beginning a pullback. Early last month, the stock re-tested its 2013 lows of $20 before quickly rebounding. Without much of an uptick in volume, the rally stalled well below the March highs. Later in the month, key support near $20, which also completes a one third retracement of the powerful bull run off the November bottom, was hit again. The subsequent rally produced another lower high as a rolled-over 50-day moving average came into play. The action since the mid-April highs gives CSCO a vulnerable look. The divergent selloff today, which is attracting accelerating trade, is even more convincing....118 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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