Cadence Design Drops 3.16% Amid Bearish Technical Signals Testing Key Support Levels

Cadence Design (CDNS) declined 3.16% to close at $343.48 in the latest session, retreating from the previous day’s high of $357.76 amid moderate volume of 1.62 million shares. This movement warrants comprehensive technical evaluation.
Candlestick Theory
Recent candlestick patterns highlight key levels, with the September 11–12 sessions forming a bearish engulfing pattern near the $357 resistance zone. The September 10 long red candle (close at $338.53, down 6.42%) confirmed selling pressure, establishing immediate support at $338.90 (August 28 low). Resistance solidifies at $355–$357, validated by multiple failed attempts to breach this level in early September. A critical support confluence exists at $342–$343, aligning with the August 26 low and the current 50-day moving average.
Moving Average Theory
The 50-day SMA (currently near $346) is being tested following the price decline, while the 100-day SMA ($330) and 200-day SMA ($320) maintain upward slopes, confirming the longer-term bullish trend. However, the 50-day SMA’s flattening trajectory suggests near-term consolidation. The price holding above the 200-day SMA signals the primary uptrend remains intact, though a sustained break below the 50-day SMA could accelerate selling toward the $330–$332 confluence zone (100-day SMA + psychological support).
MACD & KDJ Indicators
MACD (12,26,9) exhibits a bearish crossover, with the histogram turning negative in early September, signaling weakening momentum. KDJ shows similar deterioration: The %K line (currently 32) crossed below %D (48) from overbought territory (>80 on September 11), confirming near-term downside pressure. Divergence emerged as price peaked at $371.03 on July 30 while KDJ formed a lower high, foreshadowing the current pullback. This bearish confluence suggests further consolidation is probable.
Bollinger Bands
Bollinger Bands (20-day) contracted sharply in late August, preceding the early September volatility expansion. Price recently touched the lower band ($340), indicating oversold conditions. The bands’ current width remains elevated, supporting near-term choppiness. A sustained close below the lower band would imply accelerating downside, while a rebound toward the midline ($350) could offer resistance.
Volume-Price Relationship
High-volume declines on September 10 (5.85M shares, -6.42%) validated distribution, while the September 11 rally (3.57M shares, +4.78%) lacked follow-through volume the next session—a bearish divergence. The July 29 surge (4.67M shares, +9.74%) established $366 as a high-conviction support zone. Current volume patterns suggest weakness requires confirmation; a breakdown below $340 on rising volume would strengthen bearish momentum.
Relative Strength Index (RSI)
The 14-day RSI at 45 reflects neutral momentum, retreating from overbought conditions (>70 on September 11). While not yet oversold (<30), the swift decline from elevated levels signals bearish near-term sentiment. Caution is warranted given RSI’s tendency to diverge: The July peak ($371.03) coincided with an RSI reading of 72, while the September high ($357.76) registered a lower RSI high (68), reinforcing bearish divergence.
Fibonacci Retracement
Applying Fibonacci to the swing low of $252.77 (October 28, 2024) and high of $371.03 (July 30, 2025) shows critical levels. The 23.6% retracement ($347.82) aligned with the August 26 low and was breached in the latest session. Next support converges at the 38.2% level ($327.50), overlapping with the 100-day SMA and May–June consolidation highs. The 50% retracement ($311.90) aligns with the 200-day SMA, creating a high-probability support cluster. Resistance now caps advances at the 23.6% level.
Concluding Remarks
Technical indicators converge on near-term bearish momentum for Cadence Design following the rejection at $357 resistance. Critical support exists at $338–$340, with a break potentially targeting the $327–$332 confluence zone (38.2% Fibonacci + 100-day SMA). Bullish reversals require volume-backed recovery above $355. Divergences between MACD/KDJ deterioration and price’s recent lower high reinforce caution. The long-term uptrend remains supported above $320, but current signals suggest consolidation or further downside is probable near term.