3D Systems (DDD) is the largest 3D printing company by market cap as of last night’s close, at nearly $5 billion. It’s been a strongly performing momentum stock over the past year, more than doubling since last September.
After a weaker than expected earnings report this morning, the stock is down about 8% as I type. While I have not followed the fundamental story closely, the technicals present an interesting picture in 2013. Here is the chart:
The May high around 52 (red line) was not breached in June and July. Today’s rejection sends the stock back into the muddle that has comprised the past 2 months. Importantly, the 40-45 area has seen two major volume clusters so far in 2013. The first, circled in red, occurred in January after the stock doubled in only a few months, signaling the end of the parabolic move. The second, circled in green, occurred in May as the stock saw major accumulation prior to and as part of its breakout to new highs.
So that 40-45 area is an area of heightened transaction activity. But it holds additional weight given the V bottom that occurred in June, with a low around $41. The stock’s weak reaction today likely sets up a rangebound situation, with 41 and 52 as the important extremes to watch.