High-Volume Profit-Taking Gives Traders Another Chance to Buy 3D Systems

by Sam Collins | October 10, 2013 1:22 am

3D Systems (DDD[1]) — I first recommended this stock on Aug. 12[2], when it was trading under $47.50. I recommended it again on Aug. 27[3], at $50.75, after Citigroup (C[4]) analyst Kenneth Wong gave it a “strong buy” rating with a $60 price target, saying that the 3D printing market should more than triple in size over the next five years.

Analysts look for revenue of more than $505 million this year and over $628 million in 2014. Earnings are expected to rise from $0.83 in 2012 to $1.01 in 2013 and $1.33 in 2014.

Technically, DDD broke from a compound top at $51 in mid-August on high volume, hitting a high of $56.23. But Wednesday’s high-volume profit-taking turned the mid-August high into a false breakout. However, the stock is still in a long-term bull market. Support now rests at around $45, and a test of the 200-day moving average at $43.14 is possible.

This stock is at the forefront of 3D printing technology and we want to own it. Traders will have a great opportunity to position themselves in DDD if it falls close to the support line at $45. Therefore, our buy under price is $46.

DDD Chart
Click to Enlarge

Chart Key[5]

  1. DDD: http://studio-5.financialcontent.com/investplace/quote?Symbol=DDD
  2. on Aug. 12: http://investorplace.com/2013/08/trade-of-the-day-3d-systems-corp-ddd/
  3. on Aug. 27: http://investorplace.com/2013/08/trade-of-the-day-3d-systems-ddd/
  4. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  5. [Image]: http://investorplace.com/wp-content/uploads/2013/05/chart-key.gif

Source URL: http://investorplace.com/2013/10/trade-day-3d-systems-ddd/
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