3D Systems (DDD) — This stock has been on the Trade of the Day buy list since I first recommended it on Aug. 12 under $47.50. I remained bullish on the stock with recommendations on Aug. 27 and Oct. 10.
On Nov. 8, I noted that Brean Capital analyst Ananda Baruah reiterated a “buy” rating on DDD and raised the price target to $77 from $70. But on Nov. 19, when Bank of America (BAC) raised its target from $69 to $90, I balked, saying, “Despite analysts’ optimism, DDD is now trading at over 80 times this year’s consensus earnings estimate and over 63 times 2014 estimates. And the stock is now more than 70% above its 200-day moving average and 35% above its 50-day moving average.
“It appears to this technician that it is time to wait for DDD to fall into a buying zone rather than continue to chase this stock higher. Buy under $70 with a trading target of $80-plus.”
Wednesday’s price action was negative, as my proprietary indicator, the Collins-Bollinger Reversal (CBR), flashed a strong short-term sell signal. Those who still hold DDD as a trade should nail down a profit.
The $70 buy under is still in effect. This volatile performer has the potential to return double digits, but buying at the right price takes patience.
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– Sam Collins, InvestorPlace Chief Technical Analyst