DDD: Nail Down a Profit and Wait for a Better Price

by Sam Collins | December 12, 2013 1:50 am

3D Systems (DDD[1]) — This stock has been on the Trade of the Day buy list[2] since I first recommended it on Aug. 12[3] under $47.50. I remained bullish on the stock with recommendations on Aug. 27[4] and Oct. 10[5].

On Nov. 8[6], 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[7], when Bank of America (BAC[8]) 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.

DDD Chart
Click to Enlarge

Chart Key[9]

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– Sam Collins, InvestorPlace Chief Technical Analyst

  1. DDD: http://studio-5.financialcontent.com/investplace/quote?Symbol=DDD
  2. Trade of the Day buy list: https://investorplace.com/category/options-trading/trade-of-the-day/
  3. on Aug. 12: https://investorplace.com/2013/08/trade-of-the-day-3d-systems-corp-ddd/
  4. Aug. 27: https://investorplace.com/2013/08/trade-of-the-day-3d-systems-ddd/
  5. Oct. 10: https://investorplace.com/2013/10/trade-day-3d-systems-ddd/
  6. On Nov. 8: https://investorplace.com/2013/11/ddd-3d-systems/
  7. on Nov. 19: https://investorplace.com/2013/11/trade-day-3d-systems-ddd-2/
  8. BAC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BAC
  9. [Image]: https://investorplace.com/wp-content/uploads/2013/05/chart-key.gif
  10. Beat the Bell: https://order.investorplace.com/?sid=FQ8104

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