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3D Systems Corporation Message Board

  • chairman_mao_said chairman_mao_said Dec 1, 2013 10:59 AM Flag

    Where are we on the chart?

    Reading a stock chart to benefit trading requires an objective perspective that embraces multiple time scales and reasonable error tolerance. The reason I write this analysis is purely for myself because I have a large pile of cash looking for a new entry point. I have been trading DDD many times since it was $28.

    There is no Header-shoulder pattern that has been formed on the daily chart as someone so stubbornly claimed. There is no left shoulder---the two days decline from 11/6/2013 was insignificant because it was only two days and depth of the decline was too shallow. In fact, the two day decline is well within the long body of the candle prior to that. When we speak of classic chart patterns such as double tops and head-shoulders etc, the right size of the wave of swings must be large enough to filter out potential errors. A simple way to confirm a pattern is to look for the same pattern under a doubled time scale. For example, as we look at DDD's two day chart (vs daily chart), the the 2 day decline from 11/6/2013 completely disappear.

    The chart pattern of DDD from the time scale of 2 days and up is perfectly healthy.

    However, the recent consecutive bearish candles from 11/19 cannot be ignored as it was amplified by large volumes. The subsequent recovery has been too weak. Since the weak recovery corresponded to the light volume before Thanksgiving, we cannot read too much into it either. The trading pattern in the coming week will tell much more telling.

    My gues is that DDD will decline during next week. For one thing, the large volume of distribution from 11/19 does not seem to have completely played out due to the Thanksgiving interruption. For another, it is clear that further down side is to go with SSYS which is typically in synchronization with DDD. Peer performance is very important.

    I am not bearish on DDD. Due its bullishness in the larger time scale, I will buy on dips next week if it so

    Sentiment: Strong Buy

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