Just a few short weeks ago, the charts showed that after reporting disappointing earnings, the 3-D printing company's stock was poised to regain a key technical level on any bit of good news. 3-D had made fundamental improvements in profit margins while cutting operating expenses.
Fast-forward to today. 3-D shares have fallen to a low of $11.97 since May 6, when they were at $13.16. And now there is some strong competition coming in 3-D printing from none other than given the arrival HP Inc. (HPQ - Get Report) .
This week. HP unveiled its new printer line, HP Jet Fusion 3D Printing Solution. HP says the printers will "revolutionize design, prototyping and manufacturing." That's not good news for 3D Systems or competitor Stratasys (SSYS - Get Report) considering HP's long history of printing expertise.
Also, unlike 3D Systems, which failed by targeting consumers, HP is setting its sights on the industrial market, betting it can make a greater impact with corporations who can afford premium 3D printing equipment.
DDD closed Thursday at $12.25 and is currently at $12.27. Even with the recent decline, the stock is still up some 41% year to date compared with the 0.1% rise in the S&P 500 (SPX) . That's too much of a premium to risk, given HP has now emerged as a new credible threat.
From a technical perspective, the chart below, courtesy of TradingView, says a 10% decline to around $11 per share is where DDD is heading next.
DDD stock must hold support current levels of around $12 per share (silver arrow), especially given that the shares are already well below both the 20-day ($14.73 -- blue line) and 50-day ($15.15 -- pink line) averages. Breaking below $12 per share will mean DDD stock has also lost support with its 100-day target of $12.10 (yellow line). The stock has consolidated sideways over the past week. But that was prior to HP's announcement.
Given the bearishness about DDD, as seen by the high short interest volume of around 24% of its float, selling pressure will continue, sending 3D's stock below support towards $11 per share, yielding a 10% decline.