Since February, computational software producer Cadence Design Systems (CDNS) has ben steadily climbing back up the rankings in the SIA S&P 500 Index Report, climbing up from the red zone to the Green Favored Zone. Yesterday, CDNS finished in 24th position, up 10 places on the day and up 73 spots in the last month.
It increasingly looks like a pending head and shoulders top pattern in Cadence Design Systems (CDNS) is failing and accumulation is resuming. Selloffs in January-February and April May have both been successfully contained by support near $132.00 and in recent weeks, the shares have started to trend back upward. This week, CDNS has regained $160.00 and snapped a downtrend line, completing a symmetrical triangle with an upside breakout. This move has signaled the start of a new upleg that would be confirmed by a breakout over $170.00.
Next potential resistance on a breakout appears in the $190.00-$192.50 area new the previous peaks. Initial support has moved up from the 50-day average near $150.00 to the $160.00 breakout point.
Since a January selloff in Cadence Design Systems (CDNS) shares ran its course back in January, the technical situation has been steadily improving. A February bear trap reversal followed by a May retest of $134.05 confirmed underlying support had come back in and since then, an upward trend of higher lows has resumed. This week, the shares have broken out to the upside, snapping a 45-degree downtrend line, and completing a bullish Double Top pattern.
Initial resistance appears near $170.00 where a breakout would complete a bullish pending spread double top pattern, followed by $184.05, based on a horizontal count, and then the January peak near $195.30. Initial support appears near $150.95 based on a 3-box reversal.
With a bullish SMAX score of 8, CDNS is still exhibiting strength against the asset classes.
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