Shares of engineering and software company Cadence Design Systems (CDNS) have surged in the past couple of weeks. Let's see how the charts and indicators look to see if further upside gains are possible.
In the daily bar chart of CDNS, below, I see that the shares have been in an uptrend from January after a low in early November. Prices are now trading above the rising 50-day moving average line and above the rising 200-day line.
Trading volume looks like it has increased since March telling me that investor interest is higher. The On-Balance-Volume (OBV) line made a low in early November and a rising OBV line means that buyers of a stock are being more aggressive than sellers.
The Moving Average Convergence Divergence (MACD) oscillator just turned up from the zero line for a fresh outright buy signal.
In the weekly Japanese candlestick chart of CDNS, below, I can see the past three years of price history and the longer-term advance for CDNS. The 40-week moving average line is in an uptrend and prices trade above it.
The weekly OBV line made a low in early January and a slightly higher low in early May. The MACD oscillator is bullish and pointed higher again.
In this daily Point and Figure chart of CDNS, below, I can see a potential price target in the $256 area.
In this weekly Point and Figure chart of CDNS, below, I can see a price target in the $264 area.
Bottom-line strategy: I have not reviewed CDNS for a long time but the charts are bullish now. Traders should try to go long CDNS on an intraday dip towards $225. Risk to $210. The $256-$264 area is my price target.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
