In a welcome move, Cadence Design Systems saw its Relative Strength Rating rise from 69 to 76 on Thursday.
IBD's unique RS Rating tracks technical performance by showing how a stock's price action over the last 52 weeks measures up against that of the other stocks in our database.
History reveals that the best-performing stocks tend to have an RS Rating north of 80 in the early stages of their moves. See if Cadence Design Systems can continue to rebound and clear that threshold.
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Cadence Design Systems broke out earlier, but has fallen back below the prior 316.37 entry from a cup with handle. In the case where a stock breaks out then falls 7% or more below the entry price, it's considered a failed breakout. If that happens, it's best to wait for a new base to take shape. Also understand that the most recent consolidation is a later-stage base, and those involve more risk.
Regarding top and bottom line numbers, Cadence Design Systems has posted two quarters of accelerating earnings growth. Top line growth has also moved higher over the same time frame.
The company earns the No. 1 rank among its peers in the Computer Software-Design industry group. Synopsys and Autodesk are also among the group's highest-rated stocks.
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