Bearish outlook, bearish, sell off, bearish market, downtrend

Call volume is running at 28 times the intraday average

Options bulls seem to be capitalizing on 3D Systems Corp’s (NYSE:DDD) post-earnings plummet today. The shares are down 15.2% to trade at $11.23 at last glance — earlier as low as $10.67 — after the company’s second-quarter results miss and gloomy full-year revenue forecast. 

So far, 30,000 calls have been exchanged, which is 28 times the average intraday amount, in comparison to just 5,404 puts. The weekly 8/12 13-strike call is the most popular by far, with new positions being bought to open there. 

DDD could’ve already been due for a short-term drop, as its 14-day Relative Strength Index (RSI) of 80 sits firmly in “overbought” territory. However, shorts have started to cover their bets, and short interest still represents 9.3% of the stock’s available float, which could provide tailwinds. 

Analysts have yet to chime in after the disappointing earnings event, but the majority of the brokerage bunch is already bearish toward the equity. Of the five analysts in coverage, four carry a “hold” or worse rating on DDD. 

Year-to-date, 3D Systems stock is down 48%. The security appears to have found a floor at the $9 level, but plenty of long-term moving averages linger above as potential pressure, including the 150-day trendline. 

DDD August9

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By admin