The 3-D printer market is on fire. Voxeljet AG (VJET) is one you just want to let burn.
Discussed in this article: voxeljet AG ( $VJET )
I want to look at Voxeljet ( NYSE:VJET ) today. This is in that 3D printer space that everybody loves so much. You know that Stratasys ( NASDAQ:SSYS ) has been drifting higher, 3D Systems exploding higher, and ExOne ( NASDAQ:XONE ) is starting to regain this last high. So these stocks have been doing really well. But one that’s just starting to get attention is Voxeljet ( NYSE:VJET ).
Forget about this opening day deal, the stock really bottomed right around $30.00 or so and you can see what’s been happening since then, it just keeps going higher and higher. Now, our traders, and you guys know who you are, our traders have been on this for the last several days; this is absolutely fit my IPO strategy, which is actually a method of analysis it’s not predicting.
But the idea is, that once the stock prints an initial high, pulls back as they virtually always do, and even Google ( NASDAQ:GOOG ) did that, and then starts to move higher. That’s a sign that everybody here is a winner and the stocks likely to move higher. So some of the folks in the forum are looking at this and saying, “You know what? I’m afraid, it’s up, it’s up, it’s up, oh my gosh it’s up 16 percent. I’ve got to get out, I’ve got to get out.”
My suggestion was what did you expect it to do? The whole reason you’re long the stock is because you expect it to move higher. Now, with that said, when a stock goes up 15 or 16 percent in a day on basically no news you’ve got to start looking for the exits, at least on some of your position.
My suggestion is this, and I haven’t even changed the moving averages here, but we can do that. Let’s change this to say the 8-period; we’ll make it exponential moving average. So this is one way you can track the stock here on the 8-period exponential moving average, but that doesn’t work that great does it?
That might work on a 5-minute chart, right? Well, that doesn’t work either, so what are we going to do? We’re going to look for the time frame that we want to analyze this stock in, and I think a 15-minute time frame works just fine, and then let’s start playing around with moving averages.
Okay, the 20-period moving average seems to work pretty well, but you see what happens; the stock gaps up and then drift sideways towards that moving average, gaps up and drifts sideways towards that moving average again. Now this day I’m encouraged that Voxeljet ( NYSE:VJET ) pulled below that moving average and then closed back above it. Do you know why?
Well the whole market was kind of a little bit weak, this was a little bit later than others because Carl Icahn made some cautious comments we’ll say, and everybody’s all skittish and so everybody pushed the sell button until somebody said, “Wait a minute, like we didn’t know that the market might be due for a correction?”
So then they bought it all back; but the encouraging thing about Voxeljet ( NYSE:VJET ) was that the stock did indeed rally from a low of 63.00ish all the way up to almost $69.00 in the last 45 minutes of trading, that’s a pretty bullish move. So what does that mean?
What that tells me is this stock is likely going higher, you don’t want to get too lathered up about it, but what I would suggest doing is setting a trailing stop on just part of your position. Getting out all at once, because you just can’t stand making money, is really not typically a good method, because you wind up cutting your profit short. So you don’t want to do that, instead just set a trailing stop on part of your position so that the rest can run.
If you get stopped out, fine, you’ve still got a position. If the stock does in fact continue to roll over then sell the rest of it if you want. But typically what you’re going to find out is the strong stock that you’re in is going to be stronger than you think it is and so rather than getting shaken out on an entire position by just a normal pull-back, instead protect your future profits by setting a stop on just part of your position.