Cisco earnings: Will big bets on software pay off?
When Cisco Systems Inc. reports earnings Wednesday, the big question will be if the networking giant’s repeated gambles on software can reverse a yearlong sales slide, or at least point to a reversal of that trend in the future.
Cisco Earnings On Tap: Analysts Eye Cash Plans, Dividend
Cash-rich Cisco Systems (CSCO) reports earnings for its fiscal Q2 ended Jan. 28 after the close Wednesday…
After a stock breakout Tuesday and with analysts expecting management will comment on profit margins, revenue growth, M&A and shareholder returns amid the companies continuing shift to software and services from its core business of selling network switches and routers.
What to Expect When Cisco Systems Reports Earnings
Expectations are low going into Cisco Systems’ (NASDAQ:CSCO) fiscal second-quarter report. The networking hardware giant expects the troubles of the first quarter to continue, with its guidance calling for a sizable year-over-year revenue decline, even after excluding divestitures.
Today’s Trading Lesson…
The most common question I receive is about order flow versus momentum…
“How do you know when one starts and one ends?”
The chart of CMA below offers a great lesson by showing the stock alternating between momentum and order flow. The simplest explanation I can provide is that order flow happens over time, momentum is recent price action.
So what does this mean for your next trade. Well first spotting order flow versus momentum influences your trade expectation. The more obvious the order flow, the more real money committed by the institutions. This means they are in for the long trade. They are “keeping a bid” under the stock.
This means you can expect pull-backs and breakout to hold. And you can expect follow through. You can hold the trades longer, or even add to them.
Momentum is different. Institutions have not yet made the bigger commitment. == .. And neither should you. Less time means less money in the stock. As your stock moves between momentum and order flow, you adjust your trades, based on that stage.
When Does Momentum Become Order Flow?
Great question. Typically the transformation occurs after the first momentum pause. If your stock makes another move in the direction of the initial momentum. Institutions are making new commitments.
The chart below shows a great example of a stock that is clearly in a long-term uptrend, clearly recent momentum, but not order flow. The extended trading range negated the order flow. So this is a momentum trade looking for a Saturation Point.
If you want to learn more about Order Flow, Momentum, Saturation Points and combining them into a plan to make the Perfect Trade, watch this new training video == >>
On the Tape Today | 2-15-17
WDAY | Workday Inc showing a solid momentum pause on light volume which implies continuation. Planning a $86.50 buy-stop an an ultimate swing trader target of $91.75. Expecting minor resistance @ $88 and planning to add shares at this level.
EW Edwards Lifesciences Corp Setting up a volatility trade on the short side after relative weakness and a gap lower. Average True Range is a little low but the profit potential on a new swing trade makes having patience worth the risk. Game planning a $89 sell-stop and a target of $83. Stop loss on a daily chart close above $90.
Tape Reading the SPY ETF
$SPY price action offered a respectable 75 million plus shares as it keeps on chugging higher…
Yesterday we called for a profit-taking day on swing trades. If you’re still long, today’s game plan should focus on the last price compared to the open price. Of the daily candle opens higher but turns red (trading below the open)– game planning a tight stop is the right play.
If you missed the recent momentum, breakouts are not the right trade at this stage of Saturation. When your stocks or the stock market reach extended levels, the bias will be clear, but the timing of the trade can be tricky.
In this case, as the S&P 500 extends higher, closer-and-closer to a Saturation Point, you can continue to look for new longs, but…trade the pull-backs, not the breakouts.
This distinction is subtle, but important. If you don’t learn to spot it, you will end your day angry that you had the right side, but kept getting stopped out on false breakouts.
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 2-15-17 | Wednesday Edition
Short-Term Trading Momentum:
Bullish Momentum: ACAD, NFX, CERN, EXEL, KSS, CMA, AET, BBY, MNK, DLTR, NOV, TEVA, STI, LOW, ZION, JWN
Quarterly Order Flow:
Bullish Stocks to Trade: PNC, AAPL, ACN, WDAY, COST, CLVS, AGN, IBM, ABC, BA, AMGN, NSC, TSLA, ADBE, FB, AVGO, NFLX
Bearish Stocks to Trade: APA, SM, OXY, GILD, CVS, HES, LB, QCOM, KORS
2x Normal Volume: TMUS, MJN, APA, UPS, ACAD
Inside days: X, EBAY, M, TWLO, MBLY, HAL UAA, TSM, LUV, GPS, CAT, JNPR, MOS, KORS, AMZN, NUE, ADM, BA, ADBE
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