Is it time for overpriced tech stocks like
CDNS
, specialising in software and hardware, to go into considerable correction to let some steam out?
Fundamental indicators:
Technically:
What do you think about this scenario for CDNS ?
Please share your thoughts in the comments and like this idea if you would like to see more stocks analysed using Elliott Waves.
Thanks
Fundamental indicators:
- Revenue and Profits - demonstrated consistent long-term earnings growth over the past 10 years
- Profit margin - 23% in 2021 but dropped from 42% in 2020
- P/E - extremely overpriced with 56x ratio
- Liabilities - no problems with debt
Technically:
- An impulse like correction in March 2020 has completed Running Flat (ABC) wave 4 as part of bull trend that lasted since 2016
- Since then the final wave 5 has commenced with 2 impulses that formed a zig-zag of wave 1
- This choppy movement suggests that it is not a rapid impulse developing but an Ending Diagonal with 3-3-3-3-3 structure
- Hence two more zig-zags can be expected to reach and slightly update historic maximum of $192
- Once the global wave is completed a deeper correction can be expected to the levels of $95-$120 which represent 0.382 and 0.5 Fibonacci retracement levels respectively
What do you think about this scenario for CDNS ?
Please share your thoughts in the comments and like this idea if you would like to see more stocks analysed using Elliott Waves.
Thanks
In search of the optimal signals