The share Cadence Design Systems, designer of integrated circuits and electronic devices, operates in a bullish channel for over five years, now near its highs of mid-2007 at USD 24.9.
The fundamentals remain strong as evidenced by good Surperformance ratings. Sales are estimated for 2015 with a growth of +7% to 1.7 billion dollars. Similarly, margins stays high at over 13% in 2015 and 2016. Finally, the consensus of analysts remains "buyer" on this share with an average price target at USD 24.6.
From a technical point of view, the stock operates in an upward trend both in the short term than over longer time scales. The proper orientation of the moving averages suggests a continuation of the trend in the coming sessions. Prices are testing the upper limit of a channel.
Thus, taking into account the good fundamentals of the company and the interesting technical configuration, it seems appropriate to place a long position on Cadence Design Systems on the breakout of the uptrend channel. It should allow a quick return on the USD 23.9 resistance and by extension to historical highs at USD 25 (potential gain of 8%). A stop loss will be placed under the medium-term support of USD 21.75, threshold that would invalidate the strategy.
Cadence Design Systems, Inc. is No. 1 worldwide in developing and marketing design software for integrated circuits and electronic systems. Net sales break down by activity as follows:
- sale of licenses (93.8%): design software, integrated circuit verification, simulation, and performance control systems, etc. In addition, the group offers maintenance services;
- services (6.2%): consulting, training, system design and development, technical assistance, etc.
Net sales are distributed geographically as follows: the United States (41.4%), Americas (1.6%), China (16.6%), Japan (5.6%), Asia (18.8%) and Europe/Middle East/Africa (16 %).
CADENCE DESIGN SYSTEMS, INC. 
