Cadence Design Systems (CDNS) was mentioned by Jim Cramer during Tuesday’s Mad Money program as one of the best performers of the S&P 500. Let’s check out the charts of this company, that “applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality.”
In this daily bar chart of CDNS, below, we can see that prices have more than doubled from its March nadir. CDNS is trading strongly with only sideways corrections. Prices are above the rising 50-day moving average line and I would consider prices extended above the rising 200-day moving average line.
The On-Balance-Volume (OBV) line has been bullish and rising the past 11 months but it looks like the line is flattening now which suggests a balance between aggressive buyers and sellers.
The Moving Average Convergence Divergence (MACD) oscillator is in a take profits sell mode but could turn higher or lower from here depending on the price action in the days and weeks ahead.
In this weekly bar chart of CDNS, below, we can see that prices have been rallying from their base down around $40 in 2017-2018. Prices are above the rising 40-week moving average line.
The weekly OBV line shows a rising pattern the past three years and the MACD oscillator tells us that the rise since April has been very strong.
In this Point and Figure chart of CDNS, below, we used daily price data. Here we can see that prices have reached an $107 price target.
In this second Point and Figure chart of CDNS, below, we used weekly close only price data and filtered the reversals to five boxes from the “standard” three-box reversal. Here a potential price target of $178 is displayed.
Bottom line strategy: Trade CDNS from the long side risking a close below $100. Longer-term our $178 target is our price objective.
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