Chasing and Indecision for 3D Systems

By | August 14, 2014

Social media is flashing a caution sign for 3D Systems (DDD). The pattern painted by both Twitter and StockTwits momentum show indecision by traders, which leads to chasing price. Take a look at the wild swings in the daily indicator. Each move in price is accompanied by momentum chasing it. Stable stocks that have support from social media aren’t whipped around by moves in price. Instead, they experience small moves when price moves counter to the intermediate term¬†trend. This results in a slowly rising pattern from 7 day momentum. For DDD we’re seeing steep moves up and down (not a sign of stability).

Another indication of uncertainty is the StockTwits and Twitter streams 7 day momentum are moving opposite directions. This suggests that a prudent trader would stand aside and let the stock and social media shake out before taking action.

Subscribers can find more stocks with chasing patterns by looking at the daily lists of strongest and weakest stocks on Twitter and StockTwits. The stocks that bounce back and forth between bullish and bearish on a daily basis are showing volatility that can destroy a good trade.

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