By Tyler Prahm (University of Nevada, Reno), Joshua Palabay (University of Nevada, Reno), and Marin Hubert (McGill University)
Stock Name: Nano Dimension
Ticker: NASDAQ: NNDM
CMP: $10.14
Recommendation: Hold
Target: $11.50
Timeline: 3 to 4 weeks
Company Overview
Nano Dimension Ltd. is an Israel-based additive electronics provider active in the technology sector. With its 3D printing technology for printed electronics, the Company targets the growing demand for electronic devices that require sophisticated features and rely on encapsulated sensors, antennas and printed circuit boards (PCBs). The Company's PCB Jet printer system is an inkjet deposition tool for printing multi-layer circuit boards at home or office. It uses hardware, software, print-head management and nano-chemistry for Research and Development (R&D), prototyping and custom manufacturing projects. The Company targets a range of industry sectors, such as consumer electronics, medical devices and defense, aerospace, automotive, Internet of Things (IoT) and telecom.
The company was founded in 2012 and is headquartered in Ness Ziona, Israel and their primary customer-base is in the United States. Its flagship product is the proprietary DragonFly lights-out digital manufacturing (LDM) system, a precision system that produces professional multilayer circuit-boards, radio frequency antennas, sensors, conductive geometries, and molded connected devices for prototyping through custom additive manufacturing.
Product Offerings Snapshot
As we mentioned before, Nano Dimension’s main product line is a multi-layer 3D printer. Their latest and most popular product is the Dragonfly LDM Precision Additive Manufacturing for Electronics. This one is used by many companies worldwide in need of agile hardware development and innovative circuit design. It allows companies to manufacture Printed Circuit Boards and other electronics in-house. As a result, this product has many applications in diverse markets ranging from aerospace and defense to healthcare. Further, $NNDM offers to its customers a Lights-Out Digital Manufacturing (LDM) technology. This innovative technology enables systems, such as the DragonFly system, to run with little to no intervention, around the clock. In other words, this system allows clients who previously purchased the DragonFly 3D printer to print hardware 24/7. When a customer buys the DragonFly system, he can also expect to have access to the Switch software provided by Nano Dimension.
Sector and Industry Overview
ETF: ARK Autonomous Technology & Robotics ETF (ARKQ) Weightage in ETF: 2.09%
Index Comparison Analysis
Graph 1: Nano Dimension compared to ARK Autonomous Technology & Robotics ETF (Tradingview.com as of March 21, 2021)
Comparing Nano Dimension ($NNDM) to the ARK Autonomous Technology & Robotics ETF ($ARKQ), there is a direct historical comparison between both securities. $ARKQ, in this scenario, is referred to the index of $NNDM because of $NNDM’s high weightage of 2.09% within the ETF out of any other ETFs $NNDM falls under. Historically dating back to October, 2020, $NNDM and $ARKQ correlate with one another almost identically. Given the correlation, $NNDM is very responsive to underlying price movements in $ARKQ.
Moving Averages Analysis
Graph 2: ARK Autonomous Technology & Robotics ETF with simple moving averages (Tradingview.com as of March 21, 2021)
From the start of November to mid February, $ARKQ traded in an uptrend with the stock price above its 50dMA (labeled in yellow). However, due to the strong correction that impacted the entire tech sector in mid february, the stock broke that support line and decreased further down the days that followed. We could then identify the start of a downtrend with the shorter term moving averages (10dMA and 25dMA) crossing the 50dMA. $ARKQ bottomed out in the beginning of March and saw a rebound in the price since then. Recently, we observed a bullish crossover between the 10dMA (labeled in dark blue) and the 25dMA (labeled in light blue), sign of reversal of the trend. The stock is currently taking support on the 25dMA and the 50dMA acts as a strong future resistance. $ARKQ will most probably experience a period of consolidation between these levels until we see a clear crossover.
Support and Resistance Analysis
Graph 3: ARK Autonomous Technology & Robotics ETF with recent support and resistance levels (TD Ameritrade Thinkorswim Platform as of March 21, 2021)
When looking at Graph 3, the past month posts an overall uptrend on $ARKQ. As of late, consolidation has occurred with $84.00 acting as a support level and with resistance at the $90.00 price level. $ARKQ at the time of this writing is at the $84.00 support level and looks to be holding really well. Currently, the price of $ARKQ is sitting at $84.68, and looks to have a lot of upward room towards its all-time high of $101.11. As the ETF is currently below its all-time high, there is a lot of room for it to go up and we will see this when the price breaks above the $90.00 resistance level.
Trend and Pattern Analysis
Graph 4: ARK Autonomous Technology & Robotics ETF with regression channel (Tradingview.com as of March 21, 2021)
Before the breakout that occurred in the midst of February, $ARKQ was trending in a clear uptrend channel since November 2020. As a matter of fact, the regression channel indicates that nearly 98.3% of the candlesticks observed from November to mid February fall in that channel. Although the price broke out of that channel during several days at the end of 2021 before coming back, we can assume the lower and upper bands of that channel to be strong levels of support and resistance for $ARKQ. Now that the price has broken out and is trading below that channel, investors should worry about the lower bound acting as a strong resistance level. In the midst of february, the break in the regression channel should have been interpreted as a strong signal of upcoming reversal in the trend.
RSI and Stochastic Analysis
Graph 5: ARK Autonomous Technology & Robotics ETF with RSI and Stochastic analysis (Tradingview.com as of March 21, 2021)
Given the rapid historical uptrend of $ARKQ on the 4h chart, $ARKQ continued to create new highs.Within these new highs, the RSI formed a bearish divergence, as indicated with the downward support trend (highlighted in black). Considering the oversold levels of the RSI, $ARKQ may bounce upwards and reverse a trend to reach overbought levels on the RSI. However, the Stochastic RSI states otherwise. On the Stochastic RSI, the oscillator and the 3d moving averages appear to be on a steep downtrend. The steep downtrend still has room to become oversold. If it becomes oversold, it may show signs of a reversal if an uptrend occurs on the Stochastic RSI.
Technical Outlook for the Stock
Support and Resistance Analysis
Graph 6: Nano Dimension with recent support and resistance levels (TD Ameritrade Thinkorswim Platform as of March 21, 2021)
Utilizing a 6-month timeframe for $NNDM, we conducted our support and resistance analysis for the stock. The significant price levels that we used to perform this analysis are the $6.00, $7.60, $10.00, $11.50, and the $17.89 price levels. As of late, we can see that $NNDM’s current stock price is ranging between the $10.00 support level and the $11.50 resistance level. The price is currently above the $10.00 support level and for an upward momentum buy signal, we would look for a break above the $11.50 resistance level. In terms of support levels, we can see that the $6.00 and $7.60 price levels are very significant as $NNDM’s stock price has bounced and reacted heavily at these price levels. At the time of this writing, the immediate resistance level that investors will have to pay attention to is the $11.50 price level for $NNDM.
Graph 7: Nano Dimension with Fibonacci levels (Tradingview.com as of March 21, 2021)
In regard to short-term Fibonacci levels on the 1M1h chart, $NNDM holds key support levels around the 0.382 Fib level. With a break of the 0.382 Fib level, $NNDM could break down to the gap of the 0.786 Fib level. If $NNDM fills the gap, it may find new support. On the contrary, if $NNDM bounces upwards, and breaks above the 0.236 Fib level, it might find new levels of support around the $10.40 mark.
Trend and Pattern Analysis
Graph 8: Nano Dimension with trend and pattern analysis (Tradingview.com as of March 21, 2021)
For the last 6-month period, $NNDM has taken support several times on its bullish long term trend outlined in Graph 8 by the blue line. After breaking below this trend in mid-February, we can see that the stock price tried to cross above, which would have been a strong signal of continuation in the long term trend, but got rejected. Going forward, this trend will act as a strong level of resistance for $NNDM. Furthermore, the correction that we got rejected pretty quickly around the 15th of March started a descending triangle pattern for the stock. In a bullish trend, this pattern is seen as a strong continuation pattern, meaning that this is an indicator that a breakout will occur and $NNDM will potentially retest its long term trend.
Graph 9: Nano Dimension forecasted price change (Toggle.ai as of March 21, 2021)
Toggle calculates the price movement of recent trends and proposes a forecast for future trends relevant to historical trends in the past. For this specific analysis, Toggle analyzed the previous four months of price movement to represent recent volatility and price action. Taking the price action into account, Toggle’s analysis forecasts the next 6 months of price movement. Within the 6 month forecast, $NNDM is expected to move to $30 a share. A jump to $30 a share would mean a 294% jump in share price. Given the recent downside movement, $NNDM may take a lot of time to recover. A long-term recovery may result in a steady increase in share price, graphed in Toggle’s forecast.
Moving Average Analysis
Graph 10: Nano Dimension with long-term moving averages (TD Ameritrade Thinkorswim Platform as of March 21, 2021)
Utilizing a 6-month timeframe for $NNDM, we conducted our long-term exponential moving average analysis. The long-term exponential moving averages that we used to perform this analysis are the 50EMA (yellow), 100EMA (orange), and 200EMA (red). In recent months, the price action of $NNDM has been above all three of these long-term exponential moving averages which indicates bullish momentum in the stock. However, on February 23, 2021, the $NNDM’s stock price crossed and closed below the 50EMA indicating signs of buying pressure weakness as the price was not able to close above the 50EMA. From this moment on, the price was rejected at the 50EMA level and continued to fall ending its past months of bullish momentum. Having said this, the price is currently consolidating between the 50EMA and the 100EMA levels and if the price were to break above the 50EMA level and hold, it would signal a buy signal and the continuation of bullish momentum. The price of $NNDM at one point did get very close to breaking the 200EMA, however it served as a very good last resort support level showing that there is still buying pressure for the stonk on the long side. At this current moment, $NNDM’s 50EMA has not crossed below the 100EMA, so there is no sign of continuous sell-off occurring in the future. Currently, from a long-term perspective using these exponential moving averages, $NNDM looks to be very strong and is not showing any signs of a sell-off. Graph 11: Nano Dimension with short-term moving averages (TD Ameritrade Thinkorswim Platform as of March 21, 2021)
Utilizing a 6-month timeframe for $NNDM, we conducted our short-term exponential moving average analysis. The short-term exponential moving averages that we used to perform this analysis are the 10EMA (purple), 20EMA (teal), 34EMA (green), and 50EMA (yellow). In recent months, $NNDM has experienced a significant bull run going from a high of $3.28 in late September to it's all-time high of $17.89 on January 26,2021. In the past couple of months, $NNDM has been riding above the 10EMA and the 20EMA indicating extreme bullish momentum with significant buying when the price action was near any of these two moving averages. Looking at the exponential moving averages in relation to the current stock price, we can see that the all four moving averages are currently acting as resistance. The shorter-term 10EMA and the 20EMA are currently below the 34EMA (green) and 50EMA (yellow) indicating bearishness, however can be counteracted if the future price action breaks out above all of the stacked moving averages. In a bullish case, we would want the 10EMA to cross above the 20EMA and for the 20EMA to cross above the 34EMA and the 50EMA with price action above these moving averages. If this were to occur, it would indicate bullish upward momentum and would signal a buy from this recent dip from $NNDM’s all-time high.
RSI and Stochastic Analysis
Graph 12: Nano Dimension with RSI and Stochastic analysis (Tradingview.com as of March 21, 2021)
We can find on Graph 12 the stochastic oscillator (bottom chart) for $NNDM. We can observe on this one that $NNDM stock was recently overbought and is now in a decreasing trend. Additionally, we can see a divergence between this indicator and the price action occurring since February. In fact, we can see the stochastic oscillator making higher highs while the stock price made lower highs. This can be seen as an exhaustion pattern, which can be explained by the rising uncertainty about future inflation and investor’s reluctance towards high growth tech stocks. The RSI (middle chart) is currently near the 50.0 level which is a key level of resistance that acted as a strong support in the past. Further, the indicator is sitting at an average level after the rebound that occurred following the strong oversold levels observed in the beginning of March. By looking at both indicators, we can confidently say now is not an optimal timing to enter a position in the stock as the stochastic is in a downward trend and the RSI is in average levels. Investors should probably think about entering a position once the stochastic and the RSI fall below the oversold signal.
Volume Profile Analysis
Graph 13: Nano Dimension with Volume Profile analysis (TD Ameritrade Thinkorswim Platform as of March 21, 2021)
Tracing back to the middle of November of 2020, volume remains quite volatile in response to market volatility and catalytic events. The current point of control (POC) on $NNDM is at $9.32 a share. The POC represents the time period with the highest traded volume at a particular price. Historically, the POC is often used as a level of support within a specific time frame on a security. Back in December of 2020, $NNDM had some major resistance around the $9.30-$9.50 supply zone. Given that the recent price movement is below the 5M POC, $NNDM may bounce back up and regain the POC as a level of support.
TTM Squeeze Analysis
Graph 14: Nano Dimension with TTM Squeeze Analysis (TD Ameritrade Thinkorswim Platform as of March 21, 2021)
For the TTM Squeeze Analysis on $NNDM, as seen in Graph 15, the indicators histogram bars are currently moving from negative price momentum to positive price momentum. We currently do not have a squeeze as would be indicated by red dots in the indicator indicating that the Bollinger Bands are within the Keltner Channels, however, we can see that there is momentum shift going on. This is evident with the $NNDM sell-off that originated on February 10, 2021, but has since rebounded on March 5, 2021. In this TTM Squeeze Analysis, we are currently looking for sustained positive price momentum and for the indicators histogram bars to be above the 0 line.
News Event Box
Nano Dimension prices $500mil Direct Offering for $12.80 per ADS. Nano Dimension plans to use capital for future acquisitions.
Nano Dimension has first ever additively manufactured electronics used in the International Space Station. This circuit, fabricated by L3Harris, will track radio frequency space systems.