SNPS still stuck within tight trading range
Synopsys Inc. (SNPS) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SNPS ended the month 2.16% higher at 199.22 after edging lower $0.12 (-0.06%) today, strongly underperforming the Nasdaq 100 (1.78%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (SNPS as at Jul 31, 2020):
Friday's trading range has been $5.67 (2.83%), that's slightly above the last trading month's daily average range of $5.15. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for SNPS. Prices continued to consolidate within a tight trading range between 193.90 and 200.60 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading down to 194.93 earlier during the day, the market bounced off the key technical support level at 196.70 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 23rd, SNPS actually lost -2.24% on the following trading day. Synopsys ran into sellers again today around 200.60 for the third trading day in a row after having found sellers at 200.11 in the previous session and at 199.85 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 193.90 where further sell stops could get activated. With prices trading close to this year's high at 204.90, upside momentum might speed up should the stock be able to break out to new highs for the year.
Among the five 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 Synopsys. Out of 491 times, SNPS 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 62.73% with an average market move of 0.91%.