Bull & Bear: Cisco Systems (CSCO)

Shares of Cisco Systems, Inc. CSCO are trading lower on the session by 0.98%, at $17.00. With CSCO within a few pennies of its 52-week low, you have to wonder where shares are heading next. Bulls: Bull will note that shares of Cisco Systems are heavily oversold and due for, at least a snap-back rally. This rally would likely take shares back to the 50-day moving average (above $18.00) in a hurry. Bulls will also note that options activity in the name is favoring the upside. Yesterday a very larger trade bet that shares would not break the $16.00 level (puts sold) and that shares could rally all the way up to the 200-day moving average (June $18/20 call spread bought). A bullish trader is smart to copy yesterday's trade by buying the June $18.00 call for $0.40 and selling the June $20/16 strangle for a net credit of $0.45. Total net credit is $0.05. Bears: Bears have a lot of negative data to hand their hats on. The 20-day, 50-day, and 200-day moving averages are all downward-sloping and the stock continues to push to fresh lows (almost daily). The trend is clearly the bear's friend. Bears will also note that the fundamental story for Cisco Systems has deteriorated over the past six months, with growth expectations continuously unmet. A bearish trader is smart to buy the June $16.00 put outright for $0.36. On any major pop, trader may also want to consider selling calls. Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry and provide services associated with these products and their use.