Shares of Synopsys (NASDAQ:SNPS) are surging today following last night’s solid Q3 earnings report.
The stock opened today’s session with an upside gap that lifted it into new all-time-high territory. Shares have remained well bid into mid-day as a seven-week narrow consolidation (bull pennant) ends with a high-volume move. This healthy pattern began shortly after a powerful 95% gain off the March lows. During this phase SNPS was able to work off an extremely lofty overbought reading without giving back much ground.
We believe SNPS is setting up well for a fresh rally leg. Layers of support are now in place near the $205.00 to $203 area. On the downside, a close back below $197.00 would violate this week’s low. More sideways action would likely follow before a new rally can develop.