Technically bearish with RSI below 50 and death cross (SMA 20<SMA 50) , rejected at $311 resistance after failed earnings rally. Extreme valuation (P/E 77, P/S 15.7) creates vulnerability to multiple compression, with institutional selling and range-bound action signaling distribution.
Technically, CDNS is struggling to convert the post-earnings move into a sustained uptrend: RSI is slipping back below/around 50 with a falling RSI trend, and the 4h signal flags bearish momentum with SMA20 < SMA50 while price sits just below a defined resistance zone (~ $311– $312) . The recent “pop-and-drop” behavior after earnings suggests distribution/overhead supply, increasing the odds of a move back toward the lower value area and prior support ( $273 area, with a realistic overshoot toward ~ $270) . Fundamentally, valuation is stretched (P/E ~77, P/S ~15.7, EV/EBITDA ~43, PEG ~3.5) and insider selling has been notable in recent months per news flow—conditions that can amplify downside if the tape turns even mildly risk-off.
The strongest short signal is the 'sell the news' reaction to Q4 earnings on Feb 18, where a 7% pre-market surge was aggressively sold into, indicating buyer exhaustion. Technically, the stock has triggered a bearish SMA 20/SMA 50 crossover and is struggling below the psychological $300 level and Upper Bollinger Band ( $310) . With a PEG ratio of 3.5x and P/S >15x, the valuation is stretched, leaving it vulnerable to the recent GDP miss and macro headwinds. A break below the high-volume node (POC) at $294 opens a vacuum to the Value Area Low near $267.
CDNS presents a compelling LONG opportunity at current levels based on multiple confirming factors. The stock is trading at $297.71, sitting directly on high-volume support at the Point of Control ($294.05) and near the 50-day moving average ($295.58), creating a strong technical floor with institutional accumulation evident. Fundamentally, CDNS just delivered a Q4 2025 earnings beat with consistent positive surprises (4 consecutive beats averaging +9% vs estimates), demonstrating robust execution in the critical EDA software market that powers semiconductor design—a secular growth driver. The company boasts exceptional profitability metrics with 20.4% profit margins, 21.7% ROE, and a fortress balance sheet (3.05 current ratio), positioning it as a quality compounder in the technology infrastructure space. The macro environment is supportive with VIX in deep contango (0.536) signaling complacency and low volatility (1.0% 30-day), credit conditions stable, and no major earnings catalysts in the immediate 1-3 week swing window. Price is only 4.5% from resistance at $311.70 with value area high at $320.40, offering clear upside targets within a favorable risk-reward setup of 1.75:1.
CDNS presents a compelling 'buy the dip' opportunity following an irrational 5.3% sell-off despite a 'beat and raise' Q4 report. The company issued aggressive Q1 guidance (EPS $1.89- $1.95 vs $1.74 consensus) and boasts a record $7.8B backlog, confirming robust demand for its new AI-driven Chip Stack tools. Technically, price is consolidating directly on top of the high-volume Point of Control (POC) at $294 and the 4H SMA cluster, providing a structural floor for a rebound toward the Value Area High near $320.
Technically bearish with RSI below 50 and death cross (SMA 20<SMA 50) , rejected at $311 resistance after failed earnings rally. Extreme valuation (P/E 77, P/S 15.7) creates vulnerability to multiple compression, with institutional selling and range-bound action signaling distribution.
Technically bearish with RSI below 50 and death cross (SMA 20<SMA 50) , rejected at $311 resistance after failed earnings rally. Extreme valuation (P/E 77, P/S 15.7) creates vulnerability to multiple compression, with institutional selling and range-bound action signaling distribution.
C DNS presents a strong technical setup near SMA support ( $295) after recent consolidation, with fundamental strength evidenced by consecutive EPS beats (4 15 surprises) and leadership in EDA software. The low volatility market regime supports tech stocks, and a breakout above $311 resistance could catalyze momentum toward $325 target. Premium valuation is justified by 20 margins and critical role in semiconductor design ecosystem.
Thesis Competition: BEAR case won (70% vs 65%).
SHORT CDNS on failed post-earnings follow-through and bearish technical posture near resistance, targeting a rotation back to lower value/support as stretched valuation and distribution risk cap upside.
Technically, CDNS is struggling to convert the post-earnings move into a sustained uptrend: RSI is slipping back below/around 50 with a falling RSI trend, and the 4h signal flags bearish momentum with SMA20 < SMA50 while price sits just below a defined resistance zone (~ $311– $312) . The recent “pop-and-drop” behavior after earnings suggests distribution/overhead supply, increasing the odds of a move back toward the lower value area and prior support ( $273 area, with a realistic overshoot toward ~ $270) . Fundamentally, valuation is stretched (P/E ~77, P/S ~15.7, EV/EBITDA ~43, PEG ~3.5) and insider selling has been notable in recent months per news flow—conditions that can amplify downside if the tape turns even mildly risk-off.
CDNS is setting up as a range-to-upside mean reversion: price (~ $297.7) is holding above the high-volume point of control near $294 and slightly above its short-term moving averages, suggesting buyers are defending a key acceptance area and positioning for a push back toward the top of the value area. Fundamentally, Cadence just delivered another earnings beat (recent EPS surprises of ~4–15%) with guidance broadly in-line, reinforcing the durable EDA demand backdrop tied to ongoing chip complexity/AI compute buildout. Macro conditions are supportive for a swing attempt: the broader regime is low-risk and sideways with VIX contango and stable credit, which tends to favor high-quality software leaders and allows technical levels to “work” without forced de-risking.
Thesis Competition: BEAR case won (66% vs 64%).
Bull and bear cases balanced — no clear edge
CDNS presents a compelling 'buy the dip' opportunity following an irrational 5.3% sell-off despite a 'beat and raise' Q4 report. The company issued aggressive Q1 guidance (EPS $1.89- $1.95 vs $1.74 consensus) and boasts a record $7.8B backlog, confirming robust demand for its new AI-driven Chip Stack tools. Technically, price is consolidating directly on top of the high-volume Point of Control (POC) at $294 and the 4H SMA cluster, providing a structural floor for a rebound toward the Value Area High near $320.
The strongest short signal is the 'sell the news' reaction to Q4 earnings on Feb 18, where a 7% pre-market surge was aggressively sold into, indicating buyer exhaustion. Technically, the stock has triggered a bearish SMA 20/SMA 50 crossover and is struggling below the psychological $300 level and Upper Bollinger Band ( $310) . With a PEG ratio of 3.5x and P/S >15x, the valuation is stretched, leaving it vulnerable to the recent GDP miss and macro headwinds. A break below the high-volume node (POC) at $294 opens a vacuum to the Value Area Low near $267.
Thesis Competition CONTESTED: BULL case (72%) vs BEAR case (72%) - confidence delta (0%) below threshold. Trade skipped due to insufficient conviction.
CDNS presents a compelling LONG opportunity at current levels based on multiple confirming factors. The stock is trading at $297.71, sitting directly on high-volume support at the Point of Control ($294.05) and near the 50-day moving average ($295.58), creating a strong technical floor with institutional accumulation evident. Fundamentally, CDNS just delivered a Q4 2025 earnings beat with consistent positive surprises (4 consecutive beats averaging +9% vs estimates), demonstrating robust execution in the critical EDA software market that powers semiconductor design—a secular growth driver. The company boasts exceptional profitability metrics with 20.4% profit margins, 21.7% ROE, and a fortress balance sheet (3.05 current ratio), positioning it as a quality compounder in the technology infrastructure space. The macro environment is supportive with VIX in deep contango (0.536) signaling complacency and low volatility (1.0% 30-day), credit conditions stable, and no major earnings catalysts in the immediate 1-3 week swing window. Price is only 4.5% from resistance at $311.70 with value area high at $320.40, offering clear upside targets within a favorable risk-reward setup of 1.75:1.
CDNS presents a compelling LONG opportunity at current levels based on multiple confirming factors. The stock is trading at $297.71, sitting directly on high-volume support at the Point of Control ($294.05) and near the 50-day moving average ($295.58), creating a strong technical floor with institutional accumulation evident. Fundamentally, CDNS just delivered a Q4 2025 earnings beat with consistent positive surprises (4 consecutive beats averaging +9% vs estimates), demonstrating robust execution in the critical EDA software market that powers semiconductor design—a secular growth driver. The company boasts exceptional profitability metrics with 20.4% profit margins, 21.7% ROE, and a fortress balance sheet (3.05 current ratio), positioning it as a quality compounder in the technology infrastructure space. The macro environment is supportive with VIX in deep contango (0.536) signaling complacency and low volatility (1.0% 30-day), credit conditions stable, and no major earnings catalysts in the immediate 1-3 week swing window. Price is only 4.5% from resistance at $311.70 with value area high at $320.40, offering clear upside targets within a favorable risk-reward setup of 1.75:1.
CDNS is showing critical technical weakness despite earnings beat - the stock failed to hold its 7% post-earnings surge and has retreated sharply, signaling aggressive profit-taking and distribution at resistance. The daily technicals flash "strong_bearish" with RSI at 49.01 (falling trend) , MACD flat at zero showing zero momentum, and price rejected from resistance at $311.70. Most damning: the stock is down -20.9% from 52-week highs at $376.45, trapped in a sideways consolidation range unable to breakout. Valuation is stretched at 76.98 P/E and 15.65 P/S with PEG of 3.52 (significantly overvalued) , suggesting the market won't reward further multiple expansion. News indicates technical breakdown challenging the 50-day MA with analysts noting $304 as critical support - current price at $297.71 is already below that level. The broader market regime is "sideways" with VIX complacency (deep contango 0.536) setting up for volatility expansion that typically punishes high-valuation tech names. Supreme Court tariff ruling on Feb 20 creates binary macro risk for semiconductor sector.
Thesis Competition: BULL case won (73% vs 68%).