Software firm Synopsis (SNPS) surged higher last Thursday after an earnings and revenue beat last Wednesday night. Let's review the charts and indicators and see what price targets we should aim for in the weeks ahead.
In this daily bar chart of SNPS, below, I can see how prices gapped higher on Thursday and continued higher the next day. Follow-on strength is bullish in that it tells me that buying demand was not satisfied on the first day. Trading volume increased sharply telling me that traders were voting with their feet.
The daily On-Balance-Volume (OBV) line shows gains from December and tells me that buyers of SNPS have been more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator has turned up from the zero line for a fresh outright buy signal.
In this weekly Japanese candlestick chart of SNPS, below, I see a bullish picture. Prices made a strong uptrend before turning sideways and making a large continuation pattern. Prices traded sideways in a $260-$390 range for several months. Prices began to strengthen in November and have stayed above the rising 40-week moving average line. Last week's candle shows us an upside breakout.
The weekly OBV line is firm and close to making a new high for the move up. The MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of SNPS, below, I can see the upside breakout at $396. A price target of $523 is now indicated by the software.
In this weekly Point and Figure chart of SNPS, below, I can see a longer-term advance in action. The same $523 price target is projected on this chart.
Bottom line strategy: Traders could go long SNPS on a one-day dip. Risk to $390. The round number of $500 is my price target for now. $523 would be the second target.
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