Chart of the Day – $XONE : Printer Jam

by Enis September 24, 2013 12:32 pm • Commentary

The 3D printing stocks have attracted a lot of attention in the last year.  DDD and SSYS are the better known names, but XONE is a small cap stock new to the scene in 2013 that started off on a tear.

The stock IPO’ed in February, and promptly tripled over the next 6 months.  Since August though, the stock has run into trouble.  Its volume profile suggests some more serious reasons for concern:

XONE daily chart, Courtesy of Bloomberg
XONE daily chart, 50 day ma in pink, volume lower panel, Courtesy of Bloomberg

The strong uptrend in place since April, as represented by the 50 day ma, finally faltered in August.  The breakdown came on quite large volume though, which makes it more concerning.  Moreover, the big volume days over the last 6 months have occurred on down days (red circles) rather than up days (green).

In fact the On-Balance Volume indicator (which simply adds up volume on up days minus volume on down days) is around its March levels, when the stock was closer to 30.  That’s a sign of much more aggression on the part of sellers rather than buyers.

Of course, that’s just one indicator.  The stock is trying to hold the important $50 level, which was around where the stock broke out in late June.  For now, with a downward sloping 50 day moving average, and volume indicating distribution, I would stay away. If it looks like it will hold and some of these trends reverse, it could be a candidate for a very low cost speculative bet to the upside like an out-of-the-money fly or something similarly speculative. But not at the moment.