Synopsys Extends Rally To 8 Days With 11% Gain As Technicals Stay Bullish

Synopsys (SNPS) gained 0.25% to close at $523.11, marking an eighth consecutive daily advance and delivering an 11.17% cumulative gain over this period. This analysis evaluates the technical landscape through multiple frameworks.
Candlestick Theory
Recent price action displays a robust bullish sequence characterized by eight successive higher closes. The session ending July 1 formed a notable bullish candle with a $506.08-$522.85 range closing near highs, signaling strong accumulation. A potential resistance zone emerges between $525-$526, near the July 2 high of $526.09 and the year-to-date peak. Support is established near $500, aligning with June 26-27 consolidation and the psychological round number. The emergence of a small-bodied candle on July 2 after the steep ascent suggests near-term consolidation may develop as bulls pause near resistance.
Moving Average Theory
The moving average configuration reflects a strongly bullish multi-timeframe alignment. Price trades above all key averages, with the 50-day (~$500), 100-day (~$475), and 200-day (~$460) ascending in supportive sequence. The 50-day has recently crossed above the 100-day (Golden Cross), reinforcing bullish structure. This stacked arrangement confirms a durable uptrend, with the rising 50-day likely to provide dynamic support on pullbacks.
MACD & KDJ Indicators
The MACD (12,26,9) maintains a bullish posture above its signal line in positive territory, though histogram momentum has marginally softened during the latest rally phase. The KDJ oscillator shows K (84) and D (80) lines in overbought territory, with the J line at 92 indicating stretched momentum. While MACD supports continuation strength, KDJ readings suggest short-term exhaustion is possible. No significant divergence currently exists between these oscillators, implying trend extension remains feasible before mean-reversion pressure builds.
Bollinger Bands
A pronounced band expansion occurred during the eight-day advance, with price consistently riding the upper band - characteristic of strong directional momentum. The 20-period average ($505) slopes upward sharply. The +2σ upper band at $528 represents immediate resistance, while the middle band ($505) provides dynamic support. The recent volatility expansion confirms the breakout validity, though contraction may precede the next significant directional move.
Volume-Price Relationship
Volume patterns generally validate price strength, with notable accumulation during key up days: June 27 (2.15M shares, 1.40% gain) and July 1 (1.51M shares, 1.77% advance). However, the final two rally sessions saw declining volume, with July 2 volume (979K shares) dipping below the 20-day average. This divergence may reflect waning participation at current heights, warranting vigilance for potential exhaustion. Volume support materialized near the $460-$470 swing low (June 23), confirming basing action.
Relative Strength Index (RSI)
The 14-day RSI measures 76, solidly above the 70 overbought threshold. While indicative of stretched momentum, this elevated reading aligns with strong uptrends where extended overbought conditions can persist. Historically, similar RSI peaks in April and February preceded temporary consolidations rather than immediate reversals. This elevated reading should be viewed as a warning of pullback vulnerability but not an outright reversal signal while trend momentum persists.
Fibonacci Retracement
Applying Fibonacci to the $460.89 (June 23 low) to $526.09 (July 2 high) rally reveals critical levels. The 23.6% retracement at $515.45 and 38.2% at $507.90 align with congestion zones from late June. The 50% level ($493.50) coincides with multiple prior swing highs from May-June, creating significant confluent support. These retracement levels converge with psychological and technical barriers, offering objective targets should profit-taking emerge.
Confluence is evident around $500-$505, where Fibonacci support, the rising 50-day moving average, and previous consolidation align. Divergence exists between KDJ/RSI’s overbought warnings and MACD/volume-confirmed trend strength, suggesting near-term consolidation may precede further upside. Probable resistance holds at $526-528, with significant support clustered near $500. The technical structure leans bullish, though the velocity of the recent advance warrants caution for potential near-term digestion around resistance.