After gaining nearly 20% of upside in days, Cisco (CSCO) has become incredibly overvalued, technically. Although fueled by an earnings beat, the stock is up too much, too fast… in need of a near-term correction to the downside.
While fundamentally strong, the momentum crowd has gotten ahead of
itself. We can see – just by looking at RSI, MACD and MFI – that the run
is beginning to die out. It’s also trading slightly above its upper
Bollinger Band with an overbought read of zero on Williams % Range.
That tells us the stock is about to pivot south…
Consider buying to open the CSCO April 2016 27 put up to $1.45.