Is CADENCE DESIGN SYS INC Ready to Break Out of Its Range?

We've identified CADENCE DESIGN SYS INC (NASDAQ:CDNS) as a potential breakout candidate based on our stock screener's analysis. This breakout setup pattern suggests that after a strong uptrend, the stock is currently consolidating, potentially signaling a continuation of the trend. Keep an eye on NASDAQ:CDNS for further developments.

In-Depth Technical Analysis of NASDAQ:CDNS

At ChartMill, a crucial aspect of their analysis is the assignment of a Technical Rating to each stock. This rating, ranging from 0 to 10, is calculated daily by considering numerous technical indicators and properties.

Taking everything into account, CDNS scores 7 out of 10 in our technical rating. In the last year, CDNS was one of the better performers in the market. There are positive signs in the very recent evolution, but the medium term picture is slightly mixed.

• The long and short term trends are both positive. This is looking good!
• When comparing the yearly performance of all stocks, we notice that CDNS is one of the better performing stocks in the market, outperforming 79% of all stocks. We also observe that the gains produced by CDNS over the past year are nicely spread over this period.
• CDNS is one of the better performing stocks in the Software industry, it outperforms 74% of 278 stocks in the same industry.
• In the last month CDNS has a been trading in the 279.02 - 301.94 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• CDNS is currently trading in the middle of its 52 week range. The S&P500 Index however is currently trading near new highs, so CDNS is lagging the market.

Check the latest full technical report of CDNS for a complete technical analysis.

How do we evaluate the setup for NASDAQ:CDNS?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:CDNS has a 9 as its setup rating, indicating its current consolidation status.

CDNS has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is very little resistance above the current price. There is a support zone below the current price at 295.73, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for CDNS in the last couple of days, which is a good sign.

How can NASDAQ:CDNS be traded?

One strategy to consider is waiting for the actual breakout to occur, where the stock breaks out above the current consolidation zone. Traders can then enter a buy position, anticipating further upward momentum. As a risk management measure, it is advisable to set a stop loss order below the consolidation zone.

Of course, there are many ways to trade or not trade NASDAQ:CDNS and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Our Breakout screener lists more breakout setups and is updated daily.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.