December 7, 2010 | In: Technology
Is CSCO Rebounding?
CSCO had a very interesting day today. It was upgraded in the morning by Oppenheimer (an independent investment company). CSCO went up almost 2% (36 cents, highest intraday was $19.60) by the end of the day on lower than average volume. This means that he official rebound is not there yet. However, if you look at the Google chart, you will notice that a huge buying happened at 15:56 (almost 1.7 million shares), lifting the stock’s price in the after hours by 8 cents. Whoever bought this amount of shares is not stupid at all.
I have been watching CSCO closely for the last week or so as I own some shares myself, and I’ve noticed that there was a huge support at the $19 level. A lot of automated buy orders were triggered at this level, and the stock went up almost 10 cents nearly 15 minutes after it reached this new 52 week low.
CSCO is a really strong company in an outperforming industry and has few competitors, and it’s really undervalued at the current moment, but investors are punishing it for reasons that are way far into the realm of negative speculation and fear. Oppenheimer said that the worst has passed, and is already included in the stock price, and it said that the stock’s normal price in order to be at sync with the market is $23. That’s $3.5 from where we’re at.
Let’s see how much the stock will close by the end of the year, I can easily say it will be no less than $22.
For some reason CSCO reminds me of NVDA, a stock that I refused to buy at $9 (and that went down for the same reasons), even when I thought it was way undervalued. NVDA is now trading at the $14.51. Well, live and learn…