Here’s your trade on $CSCO

by MarketMentor

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Read the transcript HERE

Key Takeaways

  • The “SMART” Process: Success in high-volatility gaps requires a structured checklist: Strategy, Market context, Actionable entry, Risk-reward definition, and Tracking.

  • Institutional Supply Dynamics: Big money managers are not day traders. If they see a 20% gap, they will sell into it. However, if demand is overwhelming, they will “lift their offers” (stop selling), forcing the price even higher.

  • The 30-Point Measurement: Historically, a breakout from a base of this size targets a roughly $30.00 move (aiming for $130.00–$140.00 long-term), but it will rarely get there in a straight line.

  • Gap-and-Trap Warning: A gap-up is often a “selling event” for institutions. Without a clear Phase 2 consolidation, buying the open is “spitting in the gods of Wall Street’s eyes.”

  • Momentum vs. Volatility: Cisco isn’t just volatile right now; it has pure Momentum. Do not bet against a freight train until the tape shows a definitive reversal below the opening range.

The Cisco Kid is Back—Navigating the AI Gap-Up

The 26-Year Wait is Over

It took a quarter-century, but the “Cisco Kid” has finally returned to glory. For the investor who bought at the peak of the dot-com bubble in 2000, today isn’t just an earnings beat—it’s a vindication. But for the rest of us looking to trade the current AI-fueled explosion, the rules of the road have changed. Cisco is currently uncoiling from a “Skyscraper” base, but as Dan Fitzpatrick warns, the higher it gaps, the closer it is to a necessary rest.

The 9:45 AM “Arbiter of Truth”

Amateur traders see a 20% gap and immediately either buy from FOMO or short because “it’s gone up too much.” Both are mistakes. At Fitzpatrick Trading Group, we wait for the Opening Rotation. We look at the 9:45 AM print. If the stock is holding above that open, the institutions are “lifting their offers.” If it’s below, they are treating the gap as a liquidation event. The tape tells the truth; the headlines are just noise.

Trading as a Mercenary

Our 59-Minute Trader sessions are built for days like tomorrow. We don’t care about Cisco’s long-term dividends or corporate structure; we care about the Opening Range Breakout. By identifying the pivot points and watching the VWAP, we capture our “daily paycheck” and walk away. We aren’t married to the stock—we are married to the R-multiple.

Phase 1 is Done—Now We Wait

Cisco has officially finished Phase 1 of its breakout (the vertical “squirt”). The real wealth is made by having the patience to wait for Phase 2— the orderly pullback. When the “Momo” crowd gets bored and exits, we look for support to hold at the prior ceiling. That is where the professional entry lives.

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