3D Systems Corporation (DDD): A 3T Look At 3D – Déjà Vu All Over Again?

After a few weeks of rocketing higher, 3D Systems Corp. (DDD) ran out of green ink and has been heavy on the red in the past couple of days. Some readers have asked iStock for our 3-T take on DDD; your wish is our command.

First of all, for those who don’t know, 3D Systems develops, manufactures and markets 3D printers, print materials, on-demand custom parts services, and 3D authoring solutions for professionals and consumers.

3-D printer stocks have been strong 2013 performers. DDD has doubled YTD, while Stratasys Ltd. (SSYS) gained nearly 40%; acceptable numbers on both accounts.

[Related -Stratasys, Ltd. (NASDAQ:SSYS): Operating Margin Leverage To Drive EPS Growth]

But, what’s done is done and investors want to know about tomorrow. So, let’s take a look at three DDD charts to get a sense of what might be next, according to iStock’s interpretation.

The first thing we notice on the chart below is the obvious point of support at $68. Ah, but investors need to be careful because Wall Street’s computer programs are aware of the early November’s pivot point higher, too. If the NYC sharks want to pick up cheap 3D Systems stock and then take DDD higher, they will bloody up the tape and take out stops in $68’s neighborhood.

We also notice a combination pattern of a bearish MACD cross-under on hyper-red volume. This same set-up happened in late January. In fact, the price pattern from the early part of the year looks decidedly similar. Afterwards, the stock tried to make up abruptly lost ground, failed to establish a higher high, and then gave up its December 2012 through January 2013 gains. If history repeats, then investors looking to get into DDD might have a chance to own the stock around $57.50-$55ish early in 2014.

[Related -3D Systems Corporation (DDD) Gives Another Example Of The Risky Parabolic Arc Pattern]

On chart #2, we see more evidence of support nearby. DDD shares hit the 20-day moving average and reserved course rather quickly. The rebound adds support to what we saw above, a quick waterfall selloff followed by an immediate snap back. The only remaining question is whether DDD can establish a higher high.

You can also see that two of the last four previous trips from the top of 3D Systems normal trading range to the 20-day average were the worst of it. However, when the mid-point failed to act as a safety-net, then the stock travelled all the way to the bottom of the normal range. And what price do we see down there? $58.54 and pretty close to the bottom mentioned earlier.

Finally, DDD’s rate-of-change also shows signs of hitting support at three different levels, which adds another layer to the odds that 3D Systems is probably headed higher in the short-term.

Overall: 3D Systems Corp. (DDD) is most likely headed higher in the near-term as shares have found support on multiple levels. However, long-term, DDD could be in for a dip to the mid-$50s if the next leg doesn’t carry the tech company’s price above $81ish. 

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