A look at how a channel forms starring 3D Systems

One stock that I am monitoring closely this week is $DDD (3D Systems). At the moment the stock is trading within a channel that formed in May. Resistance is above at $32 and support below at $25.5. Currently the stock is trading just under the $30 level, so it is closer to the top of the channel:

When a stock trades within a channel pattern, it is important to understand the top and bottom levels and trade accordingly Рtrade against these levels. At some point, price will move out of the channel to create a new pattern altogether Рcreating a breakout or breakdown move. Currently the 20 day moving average has been some support. Price is battling the 8 day EMA (exponential moving average) and 10 day VWAP (volume weighted average price).

Graphic above courtesy of: Hubpages

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