Cisco Is Set To Fall
#Cisco Systems Inc. (NASDAQ:CSCO) enjoyed a rise in share price from a low of $22.47 on January 20, 2016, to a high of $34.53 on March 2, 2017, a gain of $12.06 or 53.7% in 14 months. Following this climb, however, an agglomeration of considerations is gathering to threaten to take the stock lower. Not yet reflected in share price, these factors should combine to produce a profitable short opportunity.
The tech sector has been a major component of the Trump trade, which has taken the S&P 500 more than 200 points higher since November 2016. This sector often serves as a bellwether indicator of macroeconomic health, and in the year to date the sector is up more than 10%. The S&P 500 Information Technology Sector has risen 12.5% as the main beneficiary of the Trump trade.
However, the stock market is now showing signs of disenchantment with the Trump administration as a catalyst, and the market is entering a correction. Apprehension surrounding the economic policies of the Trump administration may be expected to broadly, and disproportionately, affect the tech sector in general, and therefore Cisco in particular.
Share Price Performance Below Peers
As a leading large cap, $165.26 billion tech corporation, Cisco will have its share price hit in a transition into a stock market correction. Other negatives attaching to the corporation may dictate that Cisco is affected more than most.