Cisco Systems designs and sells a range of technologies that power the Internet. Co.'s products and technologies are grouped into the following categories: Infrastructure Platforms, which consists of its main networking technologies of switching, routing, wireless, and data center products; Applications, which consists primarily of software-related offerings that utilize the main networking and data center platforms to provide their functions; Security, which includes its network security, cloud and email security, identity and access management, threat protection, and unified threat management products; and Other Products, which consists of its technologies products.
When researching a stock like Cisco Systems, many investors are the most familiar with Fundamental Analysis — looking at a company's balance sheet, earnings, revenues, and what's happening in that company's underlying business. Investors who use Fundamental Analysis to identify good stocks to buy or sell can also benefit from CSCO Technical Analysis to help find a good entry or exit point. Technical Analysis is blind to the fundamentals and looks only at the trading data for CSCO stock — the real life supply and demand for the stock over time — and examines that data in different ways. One of these ways is called the Relative Strength Index, or RSI. This popular indicator, originally developed in the 1970's by J. Welles Wilder, looks at a 14-day moving average of a stock's gains on its up days, versus its losses on its down days. The resulting CSCO RSI is a value that measures momentum, oscillating between "oversold" and "overbought" on a scale of zero to 100. A reading below 30 is viewed to be oversold, which a bullish investor could look to as a sign that the selling is in the process of exhausting itself, and look for entry point opportunities. A reading above 70 is viewed to be overbought, which could indicate that a rally in progress is starting to get crowded with buyers. If the rally has been a long one, that could be a sign that a pullback is overdue. |
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Video: RSI Indicator