3D Systems Corporation (NYSE:DDD) is trading higher today, last seen up 3.1% at $18.12. Meanwhile, if history is any indicator, now may be the perfect time to bet on DDD stock's next leg higher.
DDD has been in a long-term uptrend since late last year, and has more than doubled since early January. Pushing the shares higher has been the rising 80-day moving average, as well as an early August post-earnings bull gap. This impressive gap also led to the stock's Aug. 28 annual high of 21.78.
According to Schaeffer's Senior Quantitative Analyst Rocky White, DDD is now within one standard deviation of the 80-day trendline, after a lengthy stretch above it. There have been four similar signals of this kind in the past three years, after which 3D Systems stock went on to average a one-month gain of 8.3%, with half of those returns positive. Another surge of this magnitude would put the shares back near $19.62 by this time in November.
Despite its long-term technical outperformance, DDD is ripe for a fresh round of upgrades. Specifically, seven of the eight brokerages following the stock sport tepid "hold" or worse ratings. Plus, with stock's average 12-month price target coming in at a 22% deficit to current levels, a round of price-target hikes may also be on the horizon.
Switching gears, short interest fell 7.2% during the past two reporting periods, and now represents a healthy 23.7% of the stock's total available float. At 3D Systems' average daily trading volume, it would take shorts over two weeks to cover their bearish bets.
Finally, now may be an attractive time for near-term traders to hop onto DDD with options. This is per the security's Schaeffer's Volatility Index (SVI) of 59%, which sits in the low 12th percentile of its annual range. In other words, muted volatility expectations are being priced into short-term contracts.