Shares of 3D Systems (DDD) gapped sharply higher early last month, after the company reported better than expected second-quarter earnings.
They continued on an upward trajectory into the end of the month, topping out at around $21.50. At that point, the stock began making lower highs above a wide zone of support in the $17.25 area. The price action formed a triangle pattern on the daily chart.
This month DDD shares moved below their rising 50 day moving average and more recently have been forming bearish long wick candles, just above support.
The relative strength index has moved below its center line, reflecting the declining price momentum. Chaikin money flow entered negative territory approximately a month ago, suggesting distribution as the triangle pattern formed.
A break below triangle support brings into play the unfilled August gap and the potential for another sharp move in 3D shares. But this time, to the downside.