Fan Yang
All posts from Fan Yang
Fan Yang in Fan Yang,

3D Systems (DDD) - The Ideal ABC Correction Scenario

3D Systems (DDD) has been in bearish correction mode, walking back the sharp gains it saw in April and May. As we stalk the correction, we can see a potential ABC correction scenario. Let's take a look at the chart.

3D Systems (DDD) Daily Chart

(click to enlarge)

The Breakout:
- Before we look at the current price action, let's recognize the bullish breakout in April. The rally broke above a year-long consolidation triangle. It was a sharp and convincing breakout.
The Pullback:
- After almost reaching 24, price started to retreat.
- After some choppy price action, price fell sharply at the end of June. Despite this sharp dip, the price action can still be considered bearish correction, and not a trend. The dominant trend still looks bullish.

- Assuming the bullish outlook, the current bearish correction could end up with an ABC structure. 
- But, even if it doesn't, the projected end of the correction should be around 17-18. 
- A break below 16 would kill the bullish outlook.
- If price instead holds above the 17-18 area, the bullish scenario still looks valid. 
- Before considering a buy, we might want to wait for the bearish price action to stall in this area, and preferably develop a bullish divergence with the RSI.