Cisco Systems Inc. (NASDAQ: CSCO) will report its fiscal second-quarter after the close of trading on Wednesday. Since so many investors have been burned here, this could be a make-or-break quarter for the networking giant. It seems as though the bar has been set low for this report, but the company remains plagued by order weakness in China and many emerging markets.

As far as why the bar is set low, the expectations are that this quarter and next quarter sales and earnings are now lower than the prior year’s reports. 24/7 Wall St. has outlined the analyst expectations from Thomson Reuters, the analyst bias, options trading expectations and the chart, and it has added in additional color.

The consensus forecast from Thomson Reuters calls for $0.46 in earnings per share (versus $0.51 a year ago) and $11.03 billion in revenue (down 8.8%). Estimates for the quarter ahead are $0.48 in earnings per share (versus $0.51 a year ago) and $11.34 billion in revenue (down 7.1%).

One new but now ongoing problem is that China weakness is partly retaliation of order blocking by the United States, and partly from fears that the NSA Snowden scandal allows for easier espionage and security breaches.

If Cisco has another weak report and cannot even make the estimate for a 7% drop in revenue in the coming quarter, then we seriously worry that investors could drag Cisco toward $20 again. At least one analyst does not agree — Sterne Agee maintained a Buy rating just a day ahead of the report, and it has a $25 price target. The team there said that there is likely downside protection to $21 based on eight-times adjusted 2015 earnings.

Cisco’s stock is up just over 2% so far in 2014, and shares were positive in mid-morning trading ahead of earnings. The consensus analyst price target is up at $23.23, but it was closer to $26 before its most recent earnings debacle. The stock has traded in a range of $19.98 to $26.49 in the past 52-weeks, and its valuation is roughly 11.5 times expected forward annual earnings.

Options traders appear to be braced for a move of up to $1.25 in either direction, using the weekly options at the $22.50 puts and $23.00 calls.

The stock chart is where Cisco gets very interesting. Shares have already recovered from the November post-earnings lows. That bottom was just above $20. Now the stock is wedged between its 50-day moving average (lower at $21.79) and its 200-day moving average (higher at $22.98). We would point out that Cisco’s stock was trying to break out from the 200-day moving average in mid-January and the stock gains simply failed over seven different trading days.

The company previously lowered its longer-term revenue and earnings guidance, down to 3% to 6% in revenue and to 5% to 7% in earnings. Of course, that is after this year, as analysts are looking now for a drop of 2% in earnings per share and a drop of almost 5% in sales.

Again, it seems as though the bar has been set very low for Cisco. That being said, missing expectations very much, with as large as the expected drops are, would become a story more of a long-term credibility concern rather than just a short-term trading situation.

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