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Playing the Cisco Earnings Miss

csco_earnings_miss

Yesterday, the market sold off and it was initiated in part by Cisco’s earnings report. This was the third in a series of misses, with the previous two showing a distinct pattern that I’ve drawn on the chart above.

The question is whether we will see some further deterioration in the share price before a move higher prior to the next earnings report.

In the near-term, I think we will assume that the pattern will be repeated, and we will use that opportunity to swap out of Cisco into one of the networking stocks that is taking market share from them. This will give us time to research the choices and figure out which one will benefit most from the move to cloud computing: Juniper, Ciena, Adtran, F5 and Riverbed are all candidates.

For those of you interested in the status of Cairo now that Mubarack has stepped down, you can check out the live feed from Al Jazeera here: http://english.aljazeera.net/watch_now/

Mark