The company that engineers, manufactures and sells 3D printers, 3D printing materials, 3D scanners, and offers a 3D printing service, 3D Systems Corporation (NYSE: DDD) seems to be getting ready for a price bump as per the latest charts.
Bullish Move – Chart Indications
#1 Falling Wedge Pattern Breakout: As you can see from the daily chart, the stock was forming a falling wedge pattern for the past several months. This pattern is marked as pink color lines. A falling wedge is a bullish pattern and a breakout from it implies that the stock may move higher in the short term. Currently, the stock has broken out of the falling wedge pattern, indicating possible bullishness.
Daily Chart – DDD
#2 Price above MAs: The price is currently above both the short-term moving average of 50-day SMA and the longer-term moving average of 200-day SMA. This usually implies a possible bullish bias for the stock.
#3 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#4 Bullish Stoch: The %K line (light blue color) of stochastic is currently above the %D line (orange color) in the daily chart. When this happens, it usually indicates a bullish setup.
#5 IH&S Pattern Breakout: The stock’s weekly chart shows that the stock has broken out of an Inverted Head and Shoulders pattern. This is marked in the chart in orange color. An IH&Ss pattern is a bullish pattern and a breakout from it is usually the sign of an upcoming bullish move. The stock is also trading above its 50-week as well as 200-week SMA, indicating that the bulls are currently in control.
Weekly Chart – DDD
#6 Bullish MACD: The MACD line is above the signal line in the weekly chart as well, indicating a possible bullish bias.
#7 Bullish ADX and DI: The ADX indicator shows bullishness in the weekly chart as well, as the (+DI) line is currently above the (-DI) line, and the ADX line is moving higher from below the (+DI) and (-DI) lines.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for DDD is above the price of $37.70.
TP: Our target prices are $42 and $47 in the next 4-6 months.
SL: To limit risk, place a stop loss below $35.20. Note that the stop loss is on a closing basis.
Our target potential upside is 11% to 25% in the next 4-6 months.
For a risk of $2.50, our first target reward is $4.30 and the second target reward is $9.30. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the falling wedge pattern with high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
— Tara
This is the #1 Stock to Buy for the AI Tidal Wave [sponsor]Marc Chaikin warned people about NVDA before its 2023 bull run - now he's naming his next pick or the AI tidal wave. Learn more here.