Cisco (CSCO) reported after the close yesterday and exceeded both EPS and revenue forecasts while reiterating forward guidance. In response, the stock initially gapped up 2.84% and kept going from their hitting multi-year highs in the process. Since those highs shortly after the open, the stock has fallen quite a bit intraday but is still well above yesterday’s close. In the past year, the $49 level has proven to be tough resistance for CSCO. On October 3 of last year, the stock ran all the way up to a multi-year high of $49.47 before falling alongside the rest of the market for the next month. Afterward, CSCO attempted to retest these levels but fell short just over $49 in early December; once again collapsing with the rest of the market and finding a bottom on Christmas Eve. Since then, the stock has seen a considerable rally.
With earnings acting as a catalyst, the stock has finally regained all of these losses in the last quarter of 2018 and is looking at a break out once again. Even if the stock does not close above the highs today, it is certainly showing potential. As shown in the chart below, over the past few years, it has usually taken around three tests of prior highs for the stock to break out further.