CDNS closes below its opening price unable to hold early session gains
Cadence Design Systems Inc. (CDNS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CDNS ended the week 4.85% higher at 86.05 after edging lower $0.06 (-0.07%) today on low volume, slightly underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Trading $0.55 higher after the open, Cadence Design was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (CDNS as at May 22, 2020):
Friday's trading range has been $1.43 (1.66%), that's far below the last trading month's daily average range of $2.55. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CDNS.
Two candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and one neutral pattern, the Doji. The last time a Doji showed up on March 31st, CDNS lost -1.21% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 88.55 where further buy stops could get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Cadence Design. Out of 303 times, CDNS closed higher 57.43% 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 61.39% with an average market move of 1.37%.