Insights 
VT 
Cisco Systems, Inc. (CSCO) is engaged in networking hardware, software, cybersecurity, and cloud solutions and trades on the NASDAQ. The company saw a sharp decline between March 2000 and October 2022, losing 90% from its all-time high of around $82 down to $8.
Following October 2022, CSCO has experienced a recovery exceeding 90%, yet it hasn’t surpassed its previous peak. From an Elliott Wave view, the cycle from October 2002 is forming an impulse wave. Super-cycle degree waves (1) and (2) ended in September 2023 and August 2024.
A pullback occurred for wave 2 of (3) into April 2025, initiating a bullish market phase. Wave ((1)) of 3 advanced from the April 2025 low to an August 2025 high, with wave ((2)) correcting it.
The current pullback is a zigzag pattern leading to a buying zone at $63.98–$59.72. This offers potential for significant gains, with a potential bounce extending wave ((3)) of 3 to $70–97. A suggested strategy is a long entry near $64 with a stop at $59, targeting a 1:3 to 1:6 risk-to-reward ratio.
We see the current pullback in Cisco as a prime entry point within a long-term bullish trend. The stock has been correcting since its August 2025 peak, and it is now approaching a key support zone between $63.98 and $59.72. This area represents an ideal place to consider bullish derivative strategies.
This technical setup is supported by solid fundamentals, as we saw in the last earnings report where Cisco beat expectations on strong demand for its AI-driven networking hardware. Recent industry forecasts also project a significant increase in enterprise IT spending on cybersecurity and cloud infrastructure through 2026. This provides a strong tailwind for Cisco’s core business segments.
The broader market environment supports this view, with the Fed striking a neutral-dovish tone in recent speeches. The latest CPI data from September showed inflation moderating to 3.1%, reducing the likelihood of further rate hikes which helps established tech names. This creates a favorable backdrop for equities to resume their upward trend after the recent market-wide correction.
For derivatives traders, this suggests a few clear strategies in the coming weeks. Buying call options with expiration dates in early 2026 allows for participation in the expected rally toward the $70 target and beyond. Alternatively, selling cash-secured puts with a strike price near $60 could be an effective way to collect premium while defining a lower entry point.
It is crucial to manage risk around the $59 level, which is the line in the sand for this bullish thesis. A decisive break below this price would invalidate the immediate upward scenario and likely trigger stop-loss orders. We note that implied volatility has ticked up during this pullback, making options premiums slightly more expensive but also offering better returns for premium sellers.
