Blue-Chip Tech Stock Could Topple Overhead Resistance

Software stock Cisco Systems Inc (NASDAQ:CSCO) is up 1.3% to trade at $78.58 at last glance, bucking today's broader market headwinds. Shares have shaved off over 10% since their Feb. 10 all-time high of $88.19. However, a historically bullish signal now flashing could help CSCO break out higher.

According to Schaeffer's Senior Quantitative Analyst Rocky White, Cisco Systems stock is within 0.75 of the 80-day moving average's 100-day average true range (ATR), after remaining above it 80% of the time in the last two weeks and in 80% of the last 42 trading sessions.

This signal has occurred 12 other times in the past 10 years, after which the equity was higher one month later 67% of the time, with an average 2.8% pop. A comparable move would help the stock conquer overhead pressure at $80, which has been in place for the last couple of months. Longer term, CSCO is up 28% in the last 12 months.

An unwinding of pessimism in the options pits could boost the shares. This is per the their 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits in the 87th percentile of its annual range. 

Options are affordably priced, per CSCO's Schaeffer's Volatility Index (SVI) of 28% that ranks higher than 28% of all other readings from the past year. In simpler terms, options traders are pricing in relatively low volatility expectations.