Cisco’s Triple Top Could Signal A New Extended Trading Range

By: Wayne Duggan

The technology sector is off to another great start so far in 2017, but Cisco Systems, Inc. (NASDAQ: CSCO) may have trouble keeping up. In recent days, the stock pushed back above $31 for the third time since September, but all three times the $31-32 rage completely stopped Cisco’s momentum. Here’s a look at where the stock could be headed next.

Triple Top

Assuming Cisco doesn’t break above $32 within the next couple of weeks, its January peak will serve as the third prong of a triple top. Cisco peaked at $31.42 in September then again at $31.62 in November.

Triple tops are notoriously bearish chart formations. The more times a stock tests a resistance level and holds, the stronger the resistance becomes. Once a resistance level has been established multiple times, traders and short sellers will use that level as a sell point, reinforcing its resistance strength. As a result, double and triple tops are often more difficult for stocks to break through than single tops.

Déjà vu

The $31 level certainly isn’t the first time Cisco has formed a multiple top pattern in recent years. Between March 2015 and June 2016, Cisco peaked in the $27.70-$28.70 range no less than six different times before finally breaking out to new highs in late 2016. Traders that used the $28 region as a sell point were rewarded during that 15-month stretch. Cisco retreated from $28 to the $24-25 area over and over again, providing plenty of profits for opportunistic traders.

Now, Cisco may have found a new extended trading range while the stock consolidates ahead of its next leg up.

Levels to Watch

The first level to watch is the resistance level itself. If Cisco makes a meaningful move to new multi-year highs above $32, it may be back on its way to its Dot Com Bubble highs around $60.

However, as long as it stays below $32, the stock will likely continue to find support in the $29-30 range. Since August, Cisco has bounced off of that level on five separate occasions.


It’s certainly no coincidence that its current support level was its previous resistance level. For Cisco bulls, the only redeeming factor in the stock building strong resistance at $32 is that the level could potentially form an equally strong support in the future.

If Cisco happens to dip below $27.70, it could be a sign that Cisco’s bull run that started back in 2011 is finally over. The stocks next potential support could come at around the $22 level where it bounced during the August 2015 flash crash and the early 2016 market sell-off.

Disclosure: the author holds no position in the stocks mentioned.

Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.

You may also be interested in...

The IPOX® Week, November 29th, 2021
Read More
The IPOX® Week, November 22nd, 2021
Read More
The IPOX® Week, November 15th, 2021
Read More
The IPOX® Week, November 8th, 2021
Read More

Try the demo

Compare Platforms
Check the background of this firm on FINRA's BrokerCheck

Our website uses cookies to improve the performance of our site, to analyze the traffic to our site, and to personalize your experience of the site. You can control cookies through your browser settings. Please find more information on the cookies used on our site in our Privacy Policy. By clicking OK, you agree to allow us to collect information through cookies.