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 – trade against these levels. At some point, price will move out of the channel to create a new pattern altogether – creating 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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