VELO: Assessing the Risk-Reward Setup Amid MACD Divergence and Structural Turnaround

The stock of Velo3D Inc (VELO) has emerged as a focal point for investors navigating the intersection of technical volatility and fundamental repositioning. As of November 2025, the company's technical indicators and macroeconomic backdrop present a complex risk-reward profile. This analysis dissects the interplay between bullish technical signals, bearish divergences, and the structural progress underpinning Velo3D's business model.

Technical Resilience: A Mixed Signal

From a technical perspective, VELO's recent performance has been a tug-of-war between optimism and caution. The MACD value of 0.520, coupled with 11 "Buy" signals from other indicators, suggests strong bullish momentum according to the press release. However, the RSI of 71.241-a level typically associated with overbought conditions-highlights the risk of short-term corrections as per technical analysis. This duality is further amplified by conflicting MACD divergence patterns. While a pivot bottom on November 21, 2025, triggered an 18.97% price surge according to trading data, a pivot top on December 11, 2025, led to a 10.98% drop as reported by stock analysis. The MACD histogram's negative turn (-0.00018798) and bearish divergence in price action underscore the fragility of the current uptrend according to price analysis.

The broader market context adds another layer of complexity. A late October 2025 correction, driven by geopolitical tensions and excessive leverage, saw $20 billion in crypto liquidations according to market reports. While analysts argue this was a technical correction rather than a fundamental downturn as per market analysis, the ripple effects have left VELO vulnerable to volatility. The Fear & Greed Index at 23 ("Extreme Fear") and an RSI of 46.08 ("Neutral") further suggest limited near-term bullish momentum as per crypto analysis.

Fundamental Repositioning: A Structural Turnaround?

Despite the technical jitters, Velo3D's fundamentals tell a story of strategic progress. The company reported Q3 2025 revenue of $13.6 million, a 65% year-over-year increase, with a $21.1 million backlog and 22% quarter-over-quarter growth as per financial data. Management reaffirmed its full-year revenue guidance of $50–60 million and projected gross margins above 30% in Q4 2025. Notably, the company expects to achieve positive EBITDA by mid-2026 according to financial projections, a critical milestone for a firm that posted a GAAP net loss of $11.8 million in Q3 2025.

Strategic partnerships are fueling this turnaround. Collaborations with the U.S. Navy's Maritime Industrial Base Program and Linde AMT for copper-nickel alloy development as per press release, along with AS9100D certification for its RPS Quality Management System as reported, position Velo3D to capitalize on the aerospace and defense sectors. The integration of Dyndrite's LPBF Pro software and expanded ties with Innovative Rocket Technologies Inc. according to company updates further solidify its role in U.S.-based additive manufacturing.

However, challenges persist. The 3.2% gross margin in Q3 2025, down sharply from 49.4% in 2024, reflects the absence of a one-time $5 million license deal as per financial reports. While management cites operational efficiencies and RPS scaling as catalysts for margin improvement as per management commentary, investors must weigh these against the company's $11.8 million cash reserves and $40–50 million non-GAAP operating expense guidance according to financial statements.

Risk-Reward Dynamics: Navigating Divergence

The key question for investors is whether VELO's technical divergence signals a temporary setback or a deeper bearish trend. Bullish MACD crossovers and the 65% revenue growth suggest resilience, but bearish divergences-particularly the breakdown below 7-day and 30-day SMAs according to price analysis-indicate fragility. The recent 10.98% drop following a pivot top as reported raises concerns about short-term liquidity and volume weakness, with trading activity dipping to 47% of July's peak according to trading data.

From a risk-reward standpoint, the structural turnaround in Velo3D's business model offers a compelling long-term narrative. The company's focus on RPS, which contributed 48% of Q3 bookings according to financial reports, aligns with the growing demand for additive manufacturing in defense and space. However, the near-term risks-geopolitical volatility, overbought conditions, and margin pressures-cannot be ignored.

Conclusion: A Calculated Bet

VELO's risk-reward setup hinges on the resolution of its technical divergence. If the stock can hold key Fibonacci support levels and confirm a bullish breakout with increased volume, the structural fundamentals-revenue growth, strategic partnerships, and EBITDA guidance-could drive a sustained rally. Conversely, a failure to reassert control above SMAs and a continuation of bearish MACD signals may force a reevaluation of the stock's near-term viability.

For investors with a medium-term horizon, VELO presents an intriguing case study in balancing technical caution with fundamental optimism. The path forward will require close monitoring of price action, volume trends, and the company's ability to execute its margin-improvement roadmap.