DDD Stock: A Bull Market in Its Infancy
I have expressed my bullish inclination towards 3D Systems Corporation (NYSE:DDD) stock because I had reason to believe that the bear market that decimated the 3D Systems stock price was on its last legs, and therefore a bull market was on the horizon.
The long-awaited indication I was looking for to finally confirm that a bull market was in development finally came on May 9, and was the focus of my publication, “3D Systems Stock Is Finally Bullish Once Again.” A beautiful rally followed, in which DDD stock appreciated to the tune of 27.55% in a matter of six days.
This movement, and the price performance that followed, is only a taste of what is to come, because I believe that this bull market in 3D Systems stock is only in its infancy. I expect much higher stock prices to follow.
Catching an investment as it transitions from a bearish investment to a bullish one provides a tremendous investing opportunity, and it is why I have spent so much time watching a particular pattern develop. This pattern, upon completion, would suggest that this investment is set on its course to a new bull market.
The following 3D Systems stock chart illustrates the pattern that confirmed the notion that a new bull market in DDD stock was developing.
Chart courtesy of StockCharts.com
The pattern that is illustrated on the price chart is a symmetrical triangle. This is a very special technical price pattern that is created by using two converging trend lines. The upper trend line represents resistance while the lower trend line represents support.
This pattern is special because, when it is resolved, a powerful reaction is expected to follow. This powerful reaction is a result of this pattern’s ability to build and store momentum within itself as it develops. This dynamic is created as result of this pattern’s shape.
The progression of this pattern causes the distance between support and resistance to contract. This contraction of space defines the battleground where a war is being waged between bullish and bearish investors fighting to get a foothold on the next direction that the stock price is set to take. When the pattern is resolved and a victor is crowned, the stored momentum is finally released.
On May 8, DDD shares exited the consolidation pattern in an upward direction, suggesting that higher prices were likely to follow. In short order, 3D Systems shares hit $23.70, creating a new high that surpassed the previous high that was created after DDD stock staged its initial advance in the first half of 2016.
The quintessential characteristic of a bull market is higher highs and higher lows. This move in price marked the first time since April 2016 that a higher high (which was followed by a higher low) was created. This price action confirms that a new bullish trend is now in development.
There are now indications on the 3D Systems stock chart that this investment is all set to stage its next advance, and the following DDD stock chart illustrates these indications.
Chart courtesy of StockCharts.com
This price chart illustrates the price advancement that was responsible for completing the symmetrical triangle. This advance was influenced by a bullish moving average convergence/divergence (MACD) indicator that is highlighted on the chart above.
MACD is an indicator that distinguishes between bullish and bearish momentum. Momentum propels an investment in a certain direction, and it is, therefore, wise to pay attention to the direction that this momentum is heading in. A bullish MACD cross correctly suggested that DDD stock was set to appreciate, and this indication remained in bullish alignment until a bearish MACD cross suggested that 3D Systems stock was done moving in an upward direction.
The signal lines that created this indication are converging, and a bullish signal can occur in the coming days. The ramifications of a bullish cross would suggest that DDD shares are set to make another attempt at higher prices.
This attempt would mark the next leg in this bullish advance, which is in its infancy.
Bottom Line on 3D Systems Stock
I have the inclination to believe that the raging bear that decimated DDD stock has finally gone back into hibernation, which means that a new bull market is now in development. New bullish indications are in line to be generated, which will reinforce the notion that 3D Systems stock is on pace to move higher.