Thinking about buying Cisco (CSCO)? Think again..and think about buying either off these two stocks instead. (August 16, 2017)
CSCO MSFT DVMT CSCO DVMT VMW DVMT CSCO DVMT CSCO DVMT
We are looking at Cisco ( NASDAQ:CSCO ). This used to be one of ‘The Four Horsemen’ late last century. I guess if you are looking at it that way now maybe it would be one of ‘The Four nags’ or something. The stock has generally been moving higher like a lot of things since early 2016. The dividend is actually pretty good. It is actually pretty solid, but the stock has been really sluggish. They report earnings, it is a widely followed stock. So many people look at Cisco ( NASDAQ:CSCO ), they look at Microsoft ( NASDAQ:MSFT ) (there is a good reason to be looking at Microsoft ( NASDAQ:MSFT )), not so much Cisco ( NASDAQ:CSCO ) and some of the others. You can look at Dell but they are not around anymore. Though Dell Technologies ( NYSE:DVMT ) is.
Cisco ( NASDAQ:CSCO ), everybody always looks at that. I am sure you will be hearing a lot about it on CNBC tomorrow. Here is the bottom line: I wouldn’t buy it. First of all, it didn’t really have that much upside to begin with, less than 10 percent. If it popped out on strong earnings and then was to run up to a new high, there is a lot of big firm ceiling right here, so it didn’t really have that much to work with here. But, they report earnings and they are in line but their guidance wasn’t particularly good, so you can see what happened. We don’t really need to look any further than this. The bottom line is, this stock is still in a trading range and I want you to avoid this, just get the heck out of it.
Do you know which one of ‘The Four Horsemen’ I would be in? Dell Technologies ( NYSE:DVMT ). You can see the big move here a few days ago. The reason for this is VMware ( NYSE:VMW ) raised their outlook. So you can see what happened with Dell ( NYSE:DVMT ). VMware ( NYSE:VMW ) looks basically the same, I wouldn’t buy both of them, make your pick. If we just look at Dell ( NYSE:DVMT ), I like it, it traded about half a million shares today. I like the fact that it is not THAT liquid. The reason I like that is, because then if buyers start coming for it they are going to wind up having to pay more. I would look to be buying Dell ( NYSE:DVMT ) on any kind of a breakout above this level.
Now I know what you are thinking, “Well you just got done doggin’ on Cisco ( NASDAQ:CSCO ) because the ceiling is right up here. So what is up with Dell ( NYSE:DVMT )?” Well they are not really the same, because unlike Cisco ( NASDAQ:CSCO ) Dell ( NYSE:DVMT ) actually DID breakout and hold the breakout. That indicates that there is buying interest here. Cisco ( NASDAQ:CSCO ), not so much. It is just there is some demand down here a little bit. I don’t know who is buying it but it isn’t me and I hope it is not you. But with Dell ( NYSE:DVMT ) we get a nice breakout here. The stock HELD the gap yesterday, pulled back but it held right around halfway through the trading range, and then today it has held up again.
You can be buying this stock here. And depending on how tight you want to go you could keep your stop right there; I really wouldn’t, it is a little bit tight. But you could at least keep it, say a little bit below 65.00, then you are risking less than 10 percent to be buying this stock and anticipating further upside. So you are buying some now; I would say if the stock breaks out above this level maybe you buy a little bit more, hang on, hang on. Then finally IF it breaks out above 70.00 then you add to that position. But as you scale in you continue to raise your stops higher and higher, so that if the stock is working in your favor you are increasing your position size without increasing your risk.
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