Synopsys SNPS Surges 3.78% on Bullish Technical Signals as 6.22% Three-Day Rally Nears Breakout

Synopsys (SNPS) has rallied 3.78% in the latest session, extending a three-day upward trend with a cumulative gain of 6.22%. The price action reflects a bullish bias, with consecutive higher highs and higher lows suggesting a potential breakout from a consolidation phase. Key support levels appear to reside around $463.73 (Dec 19 close) and $453.07 (Dec 17 close), while resistance is evident at $481.24 (Dec 22 close) and $483.91 (Dec 22 high). A bullish engulfing pattern is forming near the 50-day moving average, which currently sits at approximately $475, reinforcing the likelihood of continued upside momentum.
Candlestick Theory
The recent bullish candlestick patterns, including a strong white candle on Dec 22 and a series of higher closes, indicate strong buying pressure. The price has tested and held above the $463.73 support level, suggesting a potential reversal from prior bearish sentiment. However, caution is warranted if the price fails to close above $483.91, as this could trigger a pullback toward the $453.07–$463.73 range.

Moving Average Theory
The 50-day moving average ($475) is above both the 100-day ($465) and 200-day ($450) averages, confirming a short-term bullish trend. The 50-day MA currently supports the price, while the 200-day MA acts as a long-term floor. A sustained close above the 50-day MA would strengthen the case for a continuation of the uptrend, whereas a retest of the 100-day MA could signal a temporary consolidation phase.
MACD & KDJ Indicators
The MACD histogram has expanded positively, with the MACD line crossing above the signal line on Dec 19, indicating growing bullish momentum. The KDJ (Stochastic) oscillator, however, is approaching overbought territory (K at 85, D at 80), suggesting a potential near-term correction. Divergence between the MACD and KDJ may hint at a short-term pullback, but the overall alignment of these indicators supports a continuation of the upward trend.
Bollinger Bands
Volatility has expanded recently, with the price trading near the upper Bollinger Band ($483.91–$481.24), a classic overbought signal. The band width contraction observed in late November has since reversed, indicating increased volatility. If the price closes above the upper band, it may trigger a breakout, but a retest of the lower band ($453.07–$463.73) could stabilize the trend.
Volume-Price Relationship
Trading volume has surged on the recent rally, with the Dec 22 session recording the highest volume ($989.5 million) in the dataset. This volume expansion validates the strength of the upward move, reducing the likelihood of a false breakout. However, a decline in volume during subsequent sessions may indicate waning momentum, warranting a reassessment of the trend's sustainability.
Relative Strength Index (RSI)
The RSI has climbed to 68, nearing overbought territory. While this does not necessarily signal an immediate reversal, it suggests that the stock may experience a pullback in the near term. A move above 70 would confirm overbought conditions, but given the strong volume and bullish momentum, the RSI’s warning should be interpreted cautiously.
Fibonacci Retracement
Key Fibonacci levels from the November low ($403.63) to the December high ($483.91) include 61.8% at $462.7 and 50% at $443.8. The current price is consolidating near the 61.8% retracement level, which could act as a dynamic support/resistance zone. A break above this level may target the $483.91–$493.39 range, while a failure to hold it could trigger a test of the 50% level.
Confluence and Divergences
Strong confluence exists between the 50-day MA, bullish MACD, and expanding volume, all supporting the continuation of the uptrend. However, the KDJ’s overbought reading and RSI’s proximity to overbought territory highlight a potential short-term correction. Divergence between the MACD and KDJ suggests caution, but the overall technical setup remains bullish.

Probabilistic Outlook
The current technical landscape favors a continuation of the uptrend, with a 60–70% probability of a close above $483.91 in the next 10–15 days. However, traders should monitor the 61.8% Fibonacci level and the 50-day MA for signs of weakness. A break below $463.73 would increase the likelihood of a deeper pullback, while a sustained move above $483.91 may trigger a retest of the November high ($493.39).