20 Oct

Is This The Next Small-Cap Sector To Break Out?

by

When it comes to figuring out where the next hot stocks will be — sometimes, all I need to do is find one stock breaking out…

And that can help uncover a wealth of opportunities.

Those would actually be known as “sympathy plays”.

There are leaders in the market and there are followers — it typically happens when you see one stock take off, then not too long after…

That stock can start pulling its peers higher.

Today, I want to show you how I uncovered an $11K gain in one small-cap sector that can take off very soon, in my opinion.*

You’ll find out which stocks I’m keeping on my radar and why this sector might take off.

 

Can The 3D Printing Industry Take Off?


There’s one industry that’s been lagging the overall tech sector — 3D printing, and now may be their time to shine. 

The 3D Printing ETF (PRNT) is only up 16.26% YTD, while the Invesco QQQ ETF (QQQ) is up a whopping 33.48%. 

You might be wondering why I think 3D printing stocks can take off now.

Well, it has to do with my recent swing trade in 3D Systems Corporation (DDD).

The stock was forming not only one, but two of my favorite setups.

On Oct. 12, I let subscribers know I had DDD on my radar for a bull flag play. The chart pattern was actually a rest and retest as well… so I had high conviction in the trade. I wanted to be long $6.60 (in the consolidation area).

DDD in this case made a run from $5.5 to $7 and pulled back a little and started to trade in a range. With this setup, I typically want to buy in the consolidation (the flag / pennant) and play for the break out. 

Here’s the chart of the pattern below.

 

 

First, you’ll notice the flag pole, followed by the pullback to form the actual flag / pennant, followed by the break out.

So I actually purchased shares at $6.79 on Oct. 12 at 1:43 PM ET. With this pattern, I knew I needed to be a little patient…

DDD actually provided another opportunity to scoop up some more shares on Friday.

 

 

I actually picked up more shores at $6.74, so my average was $6.77. There were a lot of buyers and the stock has a pivot in the low $7s. 

On Monday, DDD took off and I locked in a portion of my position. I was able to sell half at $7 for +$5K on the trade. At 9:52 AM, I locked in another quarter of my initial position for about $3,700.*

I locked in the rest at 10:02 AM after the Russell 2000 ETF (IWM) hit a resistance level at $164, and in total… I locked in about $11K.

With these momentum plays, it’s important to keep them on your radar even after you trade them, in my opinion. Another pattern could pop up, and that means another opportunity for me to potentially make money.

With DDD, I’m still keeping an eye on it around that $6.60 – $7 range.

Another 3D printing stock on my radar is Stratasys Ltd. (SSYS). The stock has only 50.62M shares floating and 22.86% of those shares are short.

Not only that, but the stock is showing the same pattern that DDD was.

 

 

The range to keep an eye on here is that $14 – $14.50 range. If it breaks below $14 and stays below for quite some time, that means the pattern is broken.

However, with the way DDD moved recently, I think SSYS is one 3D printing stock that can take off, based on the chart setup.

Listen, in this market… understanding price action and having scalable and reliable strategies has been helping me.

I want to show you how to uncover small-cap momentum stocks plays. That’s why I put together this exclusive chart pattern handbook.

You’ll discover my three favorite patterns to hunt down momentum stocks before they take off.

Claim your complimentary copy here.

2 Comments

  1. Mina Nagy

    Hi , If I have $10K only for the Friday to Monday move , what would be an average good return goal ? would 5% growth of a stock would be a good indicator for me to pull out ?

    Reply
    • Lindsay

      Hi Mina. As an educational service (and not financial advisors) we cannot legally give you advice on how to manage your money. However, your broker can help you figure that out.

      Reply

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