Now that the earnings reports are over with, I'm getting interested in a couple of the 3D-printer names -- Stratasys (SSYS) and 3D Systems (DDD). Today, though, I want to focus on Stratasys.
Let's start with the weekly chart. Here, we see that Stratasys has recently tested key support at the $84.36-to-$85.84 area -- and it is holding. Overall the chart is not very bullish, but it is definitely closer to support right now.
Before I refine some parameters on the daily chart -- both for a trend setup and a counter-trend trade -- keep the following in mind. As I've pointed out before, the easier money is generally made in the direction of the larger trend, as such trades tend to have higher probability of success and to flow better. There are still opportunities to be found in some counter-trend setups, though you do need to be a bit more nimble with those and play them relatively tightly.
We'll start with the counter-trend setup by looking at Stratasys' last low, made at key price support of $83.54 to $85.15. That, moreover, coincided with Fibonacci timing cycles, which you can see represented by the histogram below the chart.
Note that there has also been some "time symmetry" for a number of the prior declines. Quite a few of these pullbacks lasted for four to seven trading days, as illustrated by the arrows on the chart -- and the May 9 low was made six days down from the last high. Right now, therefore, I have to consider the May 9 to be key and pivotal. So, if you wish to jump into the counter-trend trade, you should buy a pullback to this last low and place your risk below it.
For the trend setup, I would need to see Stratasys test and fail to clear one of the overhead resistance levels: $93.07 to $93.84, $96.72 to $98.04 and $99.53 to $100.59. If and when that happens, I will then go down to a lower-time-frame chart in order to look for a sell trigger that suggests it is worth placing a bet against the zone. Maximum risk on entry can be defined just above the price cluster that the stock has tested.
On the other hand, if these resistance zones are cleared, we'd have to consider that the May 9 low might be an important one in the bigger picture. Let's see what Stratasys does around these key decisions and trade accordingly.
Please refer here for more information on trade triggers.
See here for general guidance on Fibonacci trade setups.
