Are Cisco System, Inc. (CSCO) Bears About to Get Burned?

Cisco Systems, Inc. (NASDAQ:CSCO) intends on buying OpenDNS, but puts are still popular

Jun 30, 2015 at 2:23 PM
facebook X logo linkedin

Despite news that the company intends to buy security firm OpenDNS, Cisco Systems, Inc. (NASDAQ:CSCO) is up just 0.2% today at $27.58. Meanwhile, it looks like traders are betting on downside in the short term, as puts are crossing at 1.5 times the typical afternoon pace. The July 26.50 strike appears to be seeing buy-to-open activity, as traders bet on the shares breaching $26.50 by the close on Friday, July 17, when front-month options expire.

This focus on puts is part of an ongoing trend in the stock's option pits. CSCO's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.45 ranks higher than 68% of all similar readings from the past year. In other words, put buying has been more popular than normal of late on the stock.

Even though the stock hasn't been particularly strong today, it remains a long-term outperformer, gaining 10% year-over-year. What's more, CSCO could see support from its rising 200-day moving average, a trendline that contained the shares losses earlier today. 

Another indicator to look at is Cisco Systems, Inc.'s (NASDAQ:CSCO) 14-day Relative Strength Index (RSI), which comes in at 30. This means the stock has reached oversold territory, and could be on the verge of a technical comeback. If this does happen, an unwinding of the pessimism surrounding CSCO could act as a tailwind. 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI