Technical Insights for CADENCE DESIGN SYS INC (NASDAQ:CDNS): Is a Breakout Imminent?

A possible breakout setup was detected on CADENCE DESIGN SYS INC (NASDAQ:CDNS) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NASDAQ:CDNS.

Analyzing the Technical Aspects

ChartMill assigns a Technical Rating to every stock. This score, ranging from 0 to 10, is updated daily and is determined by evaluating multiple technical indicators and properties.

Overall CDNS gets a technical rating of 7 out of 10. In the last year, CDNS was an average performer in the market. There are positive signs in the very recent evolution, but the medium term picture is still mixed.

• Both the short term and long term trends are positive. This is a very positive sign.
• CDNS is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so CDNS is lagging the market slightly.
• In the last month CDNS has a been trading in the 287.49 - 316.37 range, which is quite wide. It is currently trading near the high of this range.
• Looking at the yearly performance, CDNS did better than 76% of all other stocks. However, this relatively good performance is mostly due to a recent big move.
• CDNS is part of the Software industry. There are 278 other stocks in this industry, CDNS did better than 54% of them.

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

How do we evaluate the setup for NASDAQ:CDNS?

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, NASDAQ:CDNS exhibits a 9 setup rating, indicating its consolidation status in recent days and weeks.

CDNS has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 318.04. Right above this resistance zone may be a good entry point. We notice that large players showed an interest for CDNS in the last couple of days, which is a good sign. Another positive sign is the recent Pocket Pivot signal.

How to trade NASDAQ:CDNS?

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.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.