Updating the Breakout into Open Air for 3D Systems DDD
Last week I highlighted a “Tracking a Reversal and Breakout Opportunity for 3D Systems DDD” and this week, I wanted to provide an update as price moves through the Open Air pocket as expected toward the likely target.
We’ll start with a quick recap of the Daily Chart and end with the Hourly Chart breakout in motion:
For a detailed description of entry and targets, see the prior post from last week as I highlighted the breakout opportunity.
The chart above simply shows the breakthrough above the $57.00 resistance area and the recent four days of (almost) straight up price action toward the initial $60.00 target and also the extended $65.00 per share 200d SMA and price overlap target.
Let’s focus our attention now on the intraday (hourly) chart for smaller trade set-ups and potential price action higher towards the upper targets:
Let’s start with a “Rounded Reversal” and momentum divergence example that tracked through the month of June.
Note the push down away from $57 toward the $48 level as positive divergences developed with a “Rounded Reversal” price pattern.
From there, we saw a breakout above the $51.00 level and price has traded up in ‘reversal’ format since mid-June as would expected from the “divergence and rounded reversal” chart pattern.
Short-term or even intraday traders can buy ‘flag’ retracements as highlighted on the journey higher.
Otherwise, swing traders had a recent opportunity to join the bullish breakout above the $57.00 per share resistance as buyers broke price to new highs.
Short-sellers helped push share prices higher with their collective stop-loss orders, and they will continue to do so should the intraday uptrend continue above the $61.00 per share level.
We do note small volume and momentum divergences so keep that in mind as you trade through the “Open Air” pocket.
Be cautious on any surprise breakdown under the $60.00 per share level.
Otherwise, look to trade additional intraday ‘flags’ (retracement) – with stops trailed under prior lows – should price indeed continue its breakout toward the $65.00 target.
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).