September 12, 2013:
My ExOne (XONE) stock trade order placed this morning ended up being filled today at 55.70. This was a surprise as I did not expect the stock to make a big down move today. The stock ended up at 55.54, down 7.10 or 11.33%, on high volume. XONE announced a share offering a couple of days ago, as did Stratasys (SSYS), another 3D printing company, but that news was already known and discounted into the stock’s price. I could not find any direct negative news that would have caused the big decline today. All three 3D printing stocks (3D Systems (DDD) , Stratasys (SSYS), and ExOne saw big declines today.
High volume declines are not a good sign. They show that the big institutions are sellers, not buyers of a stock. The big players are the primary drivers of stock prices, and you need them on your side. The volume today is a bit of a warning that the selling may not be finished. You want to see volume drying up on declines in a stock’s price. This shows that the selling is ending or is exhausted in the case of an extended decline in a stock’s price.
ExOne closed right at its 100 day moving average (DMA). The 100DMA is indicated with the blue line in the chart. The stock should find support here.
(click to enlarge)
Remember, with stock trades we always use stop-loss orders to minimize risk of loss. XONE has been making big moves lately, and is very volatile. Placing a stop-loss order under these conditions usually results in getting stopped out intraday. Traders who trade in the futures markets use a stop on close order. This order will only be triggered at the close of the market if it is below the stop price. Unfortunately, in the stock market we do not have such an order to use. So sometimes I use a stop order that is pre-determined, but not placed as an actual order. This is an advanced technique and not recommended for beginners, as it increases your risk of loss.
I will watch to see if XONE closes on high volume below the 100 DMA. If it does, that will likely portend lower prices, and I will exit the trade. I am most interested to see where the stock closes tomorrow.
For more about ExOne’s stock, please visit the following Yahoo Finance page: ExOne stock info – Yahoo Finance.