Cadence Design Systems stock retreats 1.55% as Cadence unveils AI chip design partnership with NVIDIA

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Cadence Design Systems down 1.55% today

Highlights

CDNS sustains a strong bullish trend, trading well above short- and long-term support levels despite recent profit-taking.
Momentum indicators confirm robust buyer dominance but signal overbought conditions, with heightened risk of a short-term pullback.
Price is expected to consolidate between $400 and $422 next week, with further upside likely unless support at $400 fails.

Bullish trends reinforced as price holds above key moving averages

CDNS is trading at $409.92, significantly above the MA-20 ($365.36), MA-50 ($327.16), and MA-200 ($323.75), confirming strong bullish short-, medium-, and long-term trends. The Ichimoku Kijun on D1 is $366.07, which lies well below the current price and thus serves as immediate support.

Overbought momentum signals as buyers test weekly highs

Momentum indicators are strong but show some caution signs. MACD and RSI on D1 both signal continued upward momentum, while the ADX on D1 remains neutral, suggesting trend strength is not extreme. D1 RSI at 77.80, CCI at 221.88, and Stoch RSI at 100 all highlight clear overbought conditions. BBP on D1 shows buyers dominating, though the overbought reading flags heightened risk of short-term pullback. The Awesome Oscillator also supports the prevailing bullish tone. CDNS has risen $34.99 (9.17%) over the past week, advancing from $374.93 with current price action at the very top of the weekly range and weekly volatility at 13.52%. In today's session, CDNS is retracing 1.55% from its previous close, indicating some profit-taking after a sharp weekly run-up.

Upside bias sustained as price consolidates near record levels

For the coming week, the expected range is normalized to $400–$422, keeping moves within 5% of the current price and aligning with the asset’s volatility. This places the outlook near the recent 52-week high of $416.62, while remaining well above the year’s low of $262.75. Based on W1 readings—RSI, MACD, and MA-50 all in "Buy," but ADX at "Neutral"—the probability of a further upside is high (more than 80%), making a downside move less likely. In the baseline scenario, CDNS consolidates between $400 and $422 with minor swings. A bullish scenario would see the price break above $422 and challenge new highs if buying resumes. Conversely, a bearish move would result in a pullback below $400, potentially targeting the near-term support at $366.07 (Ichimoku Kijun), though momentum bias currently favors buying.

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Previously it was reported that Cadence Design Systems was maintaining strong bullish momentum across all major timeframes, supported by positive technical signals. In light of the most recent developments, traders should remain attentive to any shift in momentum that could establish a new prevailing scenario for CDNS.

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