Shares of 3D Systems (DDD) are precariously close to their 52 weeks lows of 32.64 set on November 14, and traded as low as 32.68 today.
While I’m hopeful we may be seeing a double bottom being made today and wrote why I was a heavy buyer of the shares recently, the stock will either bounce or break support in the next 24-48 hours.
As one of the most heavily shorted stocks on the NYSE, short sellers are able to easily cover now as many longs are likely selling for tax loss purposes as the year winds down.
A break below previous support easily could lead to accelerated selling, so I suggest investors in the stock mentally prepare for that possibility and have a plan in place.
What am I doing? For now, I’m watching.
I won’t fight the market in DDD, despite my longer term positive views of the company and the overall industry.
If the stock manages to bounce on any news, more insider buying, or just from oversold conditions, then I will add shares as I’d feel more confident that a double bottom is in place. Should a double bottom be confirmed, then I’d expect a nice move up to follow over the next few weeks heading into 2015.
Conversely, should support fail, then I’ll be a seller as that prior support will turn to resistance and I’ll look for re-entry below $30.
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Disclosure: I am long shares of DDD. I was not paid by any company or third party for this article.
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