Research cutoff: Saturday, August 22, 2026 at roughly 12:30 BST / 07:30 ET.
U.S. price cutoff: Friday, August 21 regular-session close.
Horizon: roughly the next 1–15 U.S. trading sessions.
U.S. cash markets are closed today, so Friday's close is the only price confirmation that counts.
Today's answer: Cadence is the closest thing to a real turn, but I still don't have a clean buy
Friday finally produced one setup that looks more like the catch-up pattern this screen is actually trying to find.
Cadence Design Systems (CDNS) has lagged Synopsys over the longer window, but Friday was different from the false positives we have been seeing in cybersecurity. Cadence itself rose 1.73% to $319.02, while Synopsys was essentially flat. Over the last one, three and five sessions, CDNS has now started taking relative performance back, while it still trails SNPS over 10 and 20 sessions.
That is much healthier than a stock "outperforming" only because its benchmark is collapsing.
UPS is still interesting, but Friday was a small step backward. It fell about 0.6% while FedEx slipped roughly 0.3%, turning the one-session relative reading negative again. The 10- and 20-session gaps remain large, but UPS itself still has not broken out.
Fortinet and F5 both bounced Friday, but I am not promoting either one back to the active list yet. Both remain below previously defined repair levels, and much of their recent apparent relative strength came from Palo Alto and CrowdStrike falling harder.
So the weekend hierarchy is:
- CDNS: best transition watch; first real absolute + relative repair.
- UPS: secondary watch; the long gap is still there, but price has not confirmed.
- FTNT: still quarantined after breaking support; Friday is only one repair day.
- FFIV: still quarantined; one bounce after six losing sessions is not enough.
Bottom line: there is no clean U.S. catch-up buy yet. CDNS is the closest candidate for Monday, but I want one more session of proof — and there is important peer-event risk later in the week.
Candidate summary
| Name | Genuine relationship | What the screen sees | Status | What I need next |
|---|---|---|---|---|
| Cadence (CDNS) | Direct EDA peer Synopsys (SNPS) | Positive 1/3/5-session relative turn while 10/20-session lag remains | Best transition watch | Another regular session holding roughly $316–$320, preferably a close through $325–$328 while still beating SNPS |
| UPS | Direct parcel/logistics peer FedEx (FDX) | 3/5-session relative improvement, but still a large 10/20-session deficit | Secondary watch | Reclaim roughly $106–$108, then hold into a second session while maintaining positive relative performance |
| Fortinet (FTNT) | Cybersecurity peers PANW + CRWD | Short-window relative numbers look good, but FTNT only just bounced and remains under its old repair level | Rejected / quarantine | Reclaim $154–$155, then hold for two regular sessions; stronger repair above $158–$160 |
| F5 (FFIV) | App/API security vs PANW + CRWD | Friday ended a six-session losing streak, but the absolute structure is still broken | Rejected / quarantine | Reclaim $400, hold for two sessions, then restore neutral/positive five-session relative strength |
These are observation conditions, not opening-bell instructions.
Relative performance through Friday's close
For CDNS I use Synopsys, its cleanest listed EDA peer. For UPS I use FedEx. For FTNT and FFIV I use an equal-weight return basket of Palo Alto Networks and CrowdStrike.
The figures below are candidate return minus benchmark return, in percentage points. Negative means the candidate lagged.
| Candidate vs benchmark | 1 session | 3 sessions | 5 sessions | 10 sessions | 20 sessions |
|---|---|---|---|---|---|
| CDNS vs SNPS | +1.74 pp | +2.41 pp | +3.82 pp | -1.60 pp | -8.75 pp |
| UPS vs FDX | -0.26 pp | +1.08 pp | +0.47 pp | -4.43 pp | -14.35 pp |
| FTNT vs PANW + CRWD | +0.19 pp | +4.25 pp | +5.13 pp | +2.22 pp | -6.88 pp |
| FFIV vs PANW + CRWD | +0.20 pp | +4.81 pp | +4.59 pp | +2.17 pp | -9.56 pp |
The most important row is CDNS.
Its short-window relative performance is positive and CDNS itself has stopped falling: the stock rose Friday after four consecutive down sessions. That is the transition shape I want.
UPS is less convincing. It still has a very large unresolved 20-session gap, but Friday's one-day relationship slipped negative again and the stock remains around $102 rather than reclaiming the upper-$100s.
The cyber rows look spectacular if you only read the relative numbers. That is exactly why they remain dangerous. FTNT and FFIV are still below their prior repair levels; the benchmark was hammered during the week, especially CrowdStrike. A falling candidate does not become a healthy catch-up trade merely because another stock falls faster.
Seven-session walk-forward: the current filters are finally doing their job
I reconstructed the screen across the prior seven completed U.S. sessions — August 13, 14, 17, 18, 19, 20 and 21 — using only information that would have been known at each cutoff.
The main result is that the stricter rules have prevented the obvious false starts:
- FTNT's August 13 bounce failed on August 14. The two-session confirmation rule kept that from becoming a completed signal.
- FTNT then looked relatively better again as PANW and CRWD sold off, but the stock itself broke the predefined $154–$155 invalidation. The absolute-price gate correctly rejected the apparent relative strength.
- FFIV fell for six straight sessions through Thursday. Any system that promoted it simply because peers fell harder would have been buying deterioration, not mean reversion.
- UPS developed the right short-vs-long relative shape by Thursday, but it never reclaimed the $106–$108 zone. Friday then underperformed FedEx again. The reclaim rule kept the setup in research mode.
- CDNS only became interesting on Friday, when absolute price and peer-relative performance finally turned together.
I do not see evidence that the current core filters need to be loosened. In fact, the prior week argues for keeping them.
One new event-risk override
There is one refinement worth adding before Monday:
If the direct comparison peer has earnings within the next two regular sessions, a catch-up signal cannot be confirmed solely against that peer. Require either post-event confirmation or agreement from a secondary benchmark / peer basket.
This matters immediately because Synopsys reports fiscal Q3 results after the close on Wednesday, August 26. A weak SNPS print could make CDNS look relatively strong without CDNS actually doing anything. A strong SNPS print could widen the gap for a legitimate reason.
So CDNS can become actionable before Wednesday only if Cadence itself continues to strengthen, not merely because SNPS weakens ahead of earnings.
I am still not publishing a raw hit rate from seven sessions. The useful output is whether the rules prevented bad signals and what failure mode appeared — not a percentage with fake statistical precision.
1. Cadence: this is the first transition I actually like
Why the relationship is genuine
Cadence and Synopsys are the two dominant U.S.-listed electronic design automation companies. Their customers are the same semiconductor designers, foundries and system companies, and both benefit from rising chip complexity, advanced-node design, multi-die architectures and AI infrastructure spending.
That makes this a much cleaner relationship than comparing two companies that merely happen to sit in the same broad technology ETF.
Why Cadence's fundamentals do not explain away the lag
Cadence's latest quarter was strong enough that I cannot dismiss the stock's underperformance as a broken-business problem.
Q2 revenue was $1.584 billion, up from $1.275 billion a year earlier. Non-GAAP EPS reached $2.11, backlog hit a record $8.1 billion, and management raised its 2026 revenue outlook to roughly 19% year-over-year growth while lifting the non-GAAP EPS outlook to $8.10 and operating cash flow target to $2 billion.
The sell side also moved up after the quarter. Morgan Stanley raised its target to $400 from $370 with an Overweight rating, while Rosenblatt lifted its target to $420 and kept a Buy rating. Other post-earnings targets clustered around the low-$400s, though not every firm is bullish.
Community reaction is predictably more enthusiastic than useful. Recent investor threads focused on the earnings beat, AI-driven design demand and backlog, but that is sentiment context — not proof that a $319 stock must return to a $400 analyst target.
What changed Friday
CDNS closed at $319.02, up 1.73%, while SNPS was essentially flat at about $397.87.
The one-, three- and five-session relative windows are now all positive, while CDNS is still behind over 10 and 20 sessions. More importantly, Cadence itself is finally positive over the short window rather than merely "less negative."
| Item | CDNS plan |
|---|---|
| Observation area | Roughly $316–$320 |
| First useful confirmation | Another regular-session hold above the current area while still beating SNPS |
| Better trigger | Close through roughly $325–$328 with positive relative breadth |
| Invalidation | A fresh close below roughly $311–$312 would tell me Friday was another failed bounce |
| Likely catalyst | Continued AI/EDA demand, analyst estimate support, Nvidia/Synopsys results validating design-spend strength |
| Main risks | Rich valuation, broader growth-stock de-rating, SNPS earnings shock, AI capex slowdown, macro/yield pressure |
Verdict: CDNS is the best catch-up transition on today's screen, but one good Friday is not enough. I want the stock to prove that the turn survives Monday.
2. UPS: the long gap is still attractive, but Friday weakened the setup
Why the relationship is genuine
UPS and FedEx share the same parcel, logistics, e-commerce, air-freight, fuel, labor and global-trade drivers. This remains one of the cleanest cross-company relationships in the U.S. market.
UPS's Q2 numbers also improved materially. The company reported $22.8 billion of revenue, adjusted EPS of $1.76, and raised full-year 2026 guidance to approximately $91.2 billion of revenue, $8.65 billion of adjusted operating profit and $7.22 of adjusted EPS.
Management said the Amazon glide-down and related network reconfiguration had been completed.
Why the market is still discounting it
The raised outlook did not remove the execution problem. UPS still expects a demanding second-half ramp, and Q2 included roughly $891 million of after-tax transformation charges. Reuters also noted that investors were skeptical of the pace of the recovery even after the beat-and-raise.
Analyst opinion is similarly split. Recent calls include Buy ratings and targets around $130–$133, but Wells Fargo reiterated a Hold with a $110 target on August 14. That disagreement fits the current price action: the business may be improving, but the market wants proof.
Employee/community discussion is just as mixed. Some UPS workers report returning accounts or possible Amazon peak-season volume, while others describe weak hub volumes and skepticism about the restructuring. Useful color, but anecdotal and highly location-specific.
Friday's problem
UPS closed around $102, down roughly 0.6%, while FedEx fell only about 0.3%.
The 3- and 5-session relative windows remain slightly positive, and the 10- and 20-session deficits are still large. But the stock itself has not started the kind of sustained absolute move that would make me comfortable calling it catch-up.
| Item | UPS plan |
|---|---|
| Observation area | Roughly $101–$103 |
| First useful repair | Reclaim $106–$108 |
| Confirmation | Hold the repair into a second session while maintaining positive relative performance versus FDX |
| Invalidation | A decisive close below roughly $101 would weaken the setup further |
| Likely catalyst | Evidence the post-Amazon network reset is improving domestic margin and volume quality; upward estimate revisions |
| Main risks | Weak parcel volumes, restructuring costs, fuel, competition from FedEx/Amazon, second-half execution |
Verdict: still worth watching, not buying on the gap alone.
3. Fortinet: Friday repaired one day, not the setup
FTNT rose 1.80% Friday to $153.51, ending a two-day losing streak. The business story remains strong: Q2 revenue grew 26% to $2.05 billion, earnings grew 41%, billings rose 33%, and the company continues to expand its AI-security portfolio.
But the trading rule is simple: FTNT already closed below the old $154–$155 invalidation. Friday's bounce stopped just under that zone.
And the benchmark is still contaminated by a violent selloff in PANW/CRWD during the week. So the attractive short-window relative numbers are not sufficient evidence.
Verdict: keep the quarantine. First reclaim $154–$155, then hold it for two sessions. Stronger evidence begins above roughly $158–$160.
4. F5: one bounce after six losing sessions is not a catch-up turn
FFIV rose 1.81% Friday to $384.63, ending a six-session losing streak.
Its fundamentals are not obviously broken. The latest quarter delivered double-digit revenue growth, stronger product revenue and a raised full-year outlook. That is why I still track it.
But price structure matters. FFIV remains well below the old $400 invalidation and far below the earlier low-$420s catch-up trigger. Friday's gain is a first repair day, nothing more.
Verdict: no entry. Reclaim $400, hold it for two sessions, then reassess.
Next week's macro/event backdrop makes patience more valuable
Friday's market bounce did not erase a difficult week. The S&P 500 fell about 1.4% for the week and the Nasdaq about 2.0%, while long-dated Treasury yields remained a major pressure point. Reuters reported the 30-year Treasury yield reached its highest level since 2007 during the week.
Two events can move several of these relative relationships at once:
- Wednesday, August 26: Nvidia earnings after the close — a major test for AI infrastructure spending and semiconductor/EDA sentiment.
- Wednesday, August 26: Synopsys reports fiscal Q3 after the close, directly affecting the CDNS/SNPS pair.
- August 27–29: the Federal Reserve's Jackson Hole symposium, with investors looking for clues on rates and inflation.
That combination is another reason I do not want to turn Friday's first CDNS bounce into a Monday morning chase.
Bottom line
The screen finally has one setup that is moving in the right direction for the right reason.
Cadence is the best catch-up transition today. It has intact fundamentals, a genuine peer relationship with Synopsys, a still-unresolved 20-session gap, and now positive absolute and relative short-window action. But it only has one clean repair day, and SNPS earnings on Wednesday creates event risk.
UPS remains the secondary watch. The long gap is even larger, but Friday reminded us that relative structure without an absolute breakout can linger for a long time.
FTNT and FFIV stay quarantined. Friday's bounces are not enough to undo broken support or the benchmark-contamination problem.
So I am still writing no clean U.S. catch-up buy today.
If Monday gives CDNS another positive absolute session, keeps it ahead of SNPS, and pushes through roughly $325–$328, that would be the first setup in several days that starts to look genuinely actionable rather than merely statistically interesting.
Educational disclaimer: This report is for informational and educational purposes only. It is not personalized financial advice, investment research, or a recommendation to buy or sell any security. Relative relationships can break permanently rather than mean-revert.
Sources
Friday market / next-week catalysts
- Reuters — Wall Street rises Friday but falls for the week, Aug. 21, 2026: https://www.reuters.com/business/us-stock-futures-rise-after-sharp-losses-prior-session-2026-08-21/
- Reuters — Nvidia earnings and Jackson Hole to test the rally: https://www.reuters.com/business/wall-st-week-ahead-nvidia-earnings-jackson-hole-test-pillars-stock-rally-2026-08-21/
- Synopsys Investor Relations — Q3 fiscal 2026 earnings scheduled Aug. 26: https://investor.synopsys.com/news/news-details/2026/Synopsys-Announces-Earnings-Release-Date-for-Third-Quarter-Fiscal-Year-2026/default.aspx
Cadence / Synopsys
- Cadence — Q2 2026 results and raised outlook: https://www.cadence.com/en_US/home/company/newsroom/press-releases/pr-ir/2026/cadence-reports-second-quarter-2026-financial-results.html
- Reuters — Cadence raises annual forecasts on AI chip-design demand: https://www.reuters.com/business/retail-consumer/cadence-raises-annual-forecasts-demand-booms-ai-chip-design-2026-07-27/
- TipRanks — Morgan Stanley raises CDNS target to $400: https://www.tipranks.com/news/the-fly/cadence-design-price-target-raised-to-400-from-370-at-morgan-stanley-thefly-news
- Investing.com — Rosenblatt raises CDNS target to $420: https://www.investing.com/news/analyst-ratings/rosenblatt-raises-cadence-design-stock-price-target-on-ai-momentum-93CH-4816499
- Reddit — CDNS Q2 discussion / sentiment: https://www.reddit.com/r/TradeVerseNetwork/comments/1v8cr60/cadence_design_systems_cdns_q2_2026_earnings/
- Yahoo Finance — SNPS price / performance: https://finance.yahoo.com/quote/SNPS/
- MarketWatch — CDNS Friday session: https://www.marketwatch.com/data-news/cadence-design-systems-inc-stock-underperforms-friday-when-compared-to-competitors-despite-daily-gains-0e1f5aca-8cc1ca109b01
UPS / FedEx
- UPS Investor Relations — Q2 2026 results: https://investors.ups.com/news-events/press-releases/detail/2164/ups-releases-2q-2026-earnings
- Reuters — UPS raises full-year forecasts after Amazon delivery reductions: https://www.reuters.com/business/ups-raises-full-year-revenue-forecast-2026-07-28/
- TipRanks — recent UPS analyst ratings: https://www.tipranks.com/stocks/ups/forecast
- Reddit / UPSers — Amazon-volume discussion: https://www.reddit.com/r/UPSers/comments/1vi6lqt/amazon_coming/
- Reddit / UPSers — post-Q2 operating concerns: https://www.reddit.com/r/UPSers/comments/1v928ml/why_the_stock_price_fell/
- Investing.com — UPS historical data: https://www.investing.com/equities/united-parcel-historical-data
- Yahoo Finance — FedEx price / performance: https://finance.yahoo.com/quote/FDX/
Fortinet / F5 / cybersecurity
- MarketWatch — FTNT Friday rebound: https://www.marketwatch.com/data-news/fortinet-inc-stock-outperforms-competitors-on-strong-trading-day-4d571ecb-7451c90d837f
- MarketWatch — F5 Friday rebound: https://www.marketwatch.com/data-news/f5-inc-stock-outperforms-competitors-on-strong-trading-day-a4222f9e-ff0da3eeea82
- Investor's Business Daily — Fortinet's AI-security acquisition push and Q2 growth: https://www.investors.com/research/ibd-stock-of-the-day/fortinet-stock-artificial-intelligence-acquisition/
- Reddit / ValueInvesting — FTNT vs CRWD valuation discussion: https://www.reddit.com/r/ValueInvesting/comments/1upsubn/fortinet_vs_crowdstrike_cybersecurity_valuations/
- Yahoo Finance — PANW: https://finance.yahoo.com/quote/PANW/
- Yahoo Finance — CRWD: https://finance.yahoo.com/quote/CRWD/
Community links are anecdotal and included only for sentiment / operating color, not as validation of a trade.