| Cadence Design Systems provides solutions that enable customers to design products. Co.'s product offerings include software, hardware, services and reusable integrated circuit (IC) design blocks, which are referred to as intellectual property (IP). Co. also provides maintenance for its software, hardware, and IP product offerings. Co. groups its products into categories, including Custom IC Design and Simulation, which is used to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory and radio frequency designs; Digital IC Design and Signoff; Functional Verification; IP; and System Interconnect and Analysis.
When researching a stock like Cadence Design Systems, many investors are the most familiar with Fundamental Analysis — looking at a company's balance sheet, earnings, revenues, and what's happening in that company's underlying business. Investors who use Fundamental Analysis to identify good stocks to buy or sell can also benefit from CDNS Technical Analysis to help find a good entry or exit point. Technical Analysis is blind to the fundamentals and looks only at the trading data for CDNS stock — the real life supply and demand for the stock over time — and examines that data in different ways. One of these ways is called the Relative Strength Index, or RSI. This popular indicator, originally developed in the 1970's by J. Welles Wilder, looks at a 14-day moving average of a stock's gains on its up days, versus its losses on its down days. The resulting CDNS RSI is a value that measures momentum, oscillating between "oversold" and "overbought" on a scale of zero to 100. A reading below 30 is viewed to be oversold, which a bullish investor could look to as a sign that the selling is in the process of exhausting itself, and look for entry point opportunities. A reading above 70 is viewed to be overbought, which could indicate that a rally in progress is starting to get crowded with buyers. If the rally has been a long one, that could be a sign that a pullback is overdue.