3D Systems Corporation (DDD) makes 3D printers, and the stock is in recovery mode since trading as low as $9.35 on Dec. 24. This stock was a momentum darling from below $5.00 per share in 2010 to its all-time intraday high of $97.28 in January 2014. Since then, it traded as low as $6.00 per share in January 2016. There have been some trading opportunities since then, but 3D Systems stock should not be a long-term portfolio holding.
3D Systems shares closed Tuesday, Feb. 26, at $14.17, up 39.3% so far in 2019 and in bull market territory at 51.6% above the Dec. 24 low of $9.35. Beware of volatility, as the stock is also in bear market territory at 34.9% below its 2018 high of $21.78 set on Aug. 28.
Analysts expect 3D Systems to post earnings per share of six cents when it reports results after the closing bell on Feb. 28. Better-than-expected earnings per share may not mean a significant gain in revenue, so Wall Street says to keep an eye on cash flow. Given some signs of increased demand, production capacity may be ramped higher in 2019. This stock will likely have extreme volatility after earnings. On Aug. 7, the stock gapped higher on earnings. Then, on Nov. 30, the stock gapped lower on earnings.
The daily chart for 3D Systems
3D Systems stock declined by 57% from its 2018 intraday high of $21.78 set on Sept. 28 to its Dec. 24 low of $9.35. This bear market has been consolidated since the Dec. 24 low, but note that a "death cross" formed on Dec. 13, when the 50-day simple moving average fell below the 200-day simple moving average to indicate that lower prices would follow. This remains in play, with the 50-day and 200-day simple moving averages now at $11.75 and $14.48, respectively, and the stock is closing in on the 200-day SMA.
The stock closed Dec. 31 at $10.17, which resulted in my quarterly pivot at $13.45. My annual risky level is above the chart at $38.82. The close of $12.76 on Jan. 31 resulted in my monthly risky level at $15.50.
The weekly chart for 3D Systems
The weekly chart for 3D Systems is positive, with the stock above its five-week modified moving average of $12.86 and just above the 200-week simple moving average, or "reversion to the mean," at $13.92. The 12 x 3 x 3 weekly slow stochastic reading is projected to rise to 77.66 this week, up from 68.67 on Feb. 22.
Trading Strategy: The stock is in a neutral zone between my quarterly pivot at $13.45 and my monthly risky level at $15.50. A positive reaction to earnings targets $15.50, which fills the price gap to the Oct. 29 low of $15.33. A negative reaction to earnings targets $13.35, with the 50-day simple moving average at $11.75.
Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.