CDNS closes higher for the 3rd day in a row
Cadence Design Systems Inc. (CDNS) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CDNS finished the month 13.85% higher at 109.25 after gaining $1.60 (1.49%) today, slightly underperforming the Nasdaq 100 (1.78%). Today's close at 109.25 marks the highest recorded closing price ever. Trading up to $2.21 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 24th, CDNS gained 2.61% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (CDNS as at Jul 31, 2020):
Friday's trading range has been $3.18 (2.94%), that's slightly above the last trading month's daily average range of $2.80. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CDNS.
After trading down to 106.08 earlier during the day, the share bounced off the key technical support level at 106.54 (S1). The failure to close below the support could increase that levels importance as support going forward.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 102.18.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Cadence Design. Out of 471 times, CDNS closed higher 56.69% 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 62.42% with an average market move of 1.50%.