Cadence Design Surges 9.74% to Record High on Heavy Volume Breakout

Cadence Design (CDNS) surged 9.74% in the most recent session, extending gains to three consecutive days with a cumulative 12.82% rally, closing at $366.26 on elevated volume. This analysis examines key technical dynamics through multiple frameworks.
Candlestick Theory
The stock exhibits a robust three-white-soldier pattern culminating in a decisive breakout candle on July 29, 2025, where prices gapped up from $334.99 to $353 and closed near the session high ($370.61 high, $366.26 close). This signals strong accumulation and establishes the gap zone ($334.99–$353) as immediate support. Resistance is now psychological near the new all-time high of $370.61, with a confirmed close above this level potentially extending the uptrend. Earlier congestion between $318-$328 during mid-July now serves as secondary support.
Moving Average Theory
All key moving averages display bullish alignment: the 50-day MA ($312) recently crossed above the 100-day MA ($305), while both remain above the rising 200-day MA ($282). The price currently trades 17% above the 50-day MA, indicating strong near-term momentum. Golden crosses occurred in May 2025 (50>100) and June 2025 (50>200), confirming the primary uptrend. This configuration suggests institutional buying is supporting the advance.
MACD & KDJ Indicators
The MACD (12,26,9) shows accelerating bullish momentum with the histogram expanding above the signal line since July 23, 2025, reaching its widest margin in three months. Meanwhile, KDJ (9,3,3) enters overbought territory with the %K line (87) crossing above %D (83) – typically constructive in strong trends. While no bearish divergences are evident, the KDJ’s overbought reading suggests potential near-term consolidation. Both oscillators agree on sustained upward pressure.
Bollinger Bands
Prices have pierced the upper Bollinger Band (20-day, 2SD) during the July 29 breakout, coinciding with a 42% expansion in band width – the largest volatility spike since May 2025. This band expansion confirms breakout validity historically. Closing above the upper band suggests continuation potential, though mean-reversion tendencies warrant monitoring for pullbacks toward the $350 midline.
Volume-Price Relationship
The breakout was validated by volume surging 73% above the 20-day average to 4.65 million shares – the highest since May 28, 2025. Volume progressively increased during the three-day rally, confirming accumulation. The volume-weighted average price (VWAP) for July 29 ($363.50) now serves as intraday support. This volume signature increases confidence in trend sustainability.
Relative Strength Index (RSI)
The 14-day RSI rockets to 81, deep in overbought territory and at 6-month highs. While this warns of potential consolidation, its significance is tempered by the stock’s strong trend context and high momentum readings from MACD/KDJ. Historically, RSI >80 in CDNS has preceded brief pauses rather than reversals. Traders should note that overbought conditions could persist during powerful uptrends.
Fibonacci Retracement
Applying Fib levels to the rally from April’s swing low ($232.88) to the current high ($370.61): The 23.6% retracement ($338.90) aligns precisely with the upper gap boundary ($334.99-$353), creating a high-probability support confluence. Intermediate supports cluster at 38.2% ($321.97) and 50% ($301.74), both aligning with prior consolidation zones from June-July. These Fib levels provide strategic entry points should retracements occur.
Confluence and Divergence Observations
Significant confluence exists at $338-$353, where the gap support, 23.6% Fib, and 20-day Bollinger Midband converge – a critical bull/bear demarcation zone. The lone divergence emerges from RSI overbought warnings contrasting with MACD/KDJ momentum confirmation, suggesting potential near-term consolidation within an intact uptrend. Volume-fueled price breakout, aligned moving averages, and volatility expansion collectively outweigh overbought oscillators in this technical configuration.