CDNS closes within previous day's range
Cadence Design Systems Inc. (CDNS) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
CDNS finished the week 1.15% higher at 74.58 after losing $0.84 (-1.11%) today on low volume, slightly underperforming the Nasdaq 100 (-0.82%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CDNS as at Jan 24, 2020):
Friday's trading range has been $2.23 (2.94%), that's far above the last trading month's daily average range of $1.26. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CDNS.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. In spite of a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on November 18, 2019, CDNS actually gained 1.87% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 73.69 (S1). After having been unable to move lower than 74.20 in the previous session, Cadence Design found buyers again around the same price level today at 74.08.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
2019's high at 77.08 is within reach and we might see further upside momentum should the market manage to break out beyond.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for Cadence Design. Out of 541 times, CDNS closed higher 55.82% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 62.11% with an average market move of 1.32%.