MMM: Time for a Technical Breakout 1W (Jun. 09)

9. Juni 2020

X Force Global Analysis:


3M (MMM) is a multinational conglomerate corporation operating in the fields of industry, worker safety, US health care, and consumer goods. In this analysis, we take a purely technical approach to the stock, assessing its bullish probabilities.

Analysis

- What's most noticeable in 3M's weekly chart is the descending parallel channel.
- Prices have been creating constant lower highs and lower lows
- This downtrend has been intact even before the Corona Virus (Covid-19) situation
- Prices are currently trading below the 200 Simple Moving Average (SMA)
- They have also been rejected by the Ichimoku cloud resistance twice.
- The Relative Strength Index (RSI) is at neutral levels, and the Moving Average Convergence Divergence (MACD) has formed a golden cross, indicating potential bullish momentum
- Should we see a breakout from the current price levels through the descending parallel channel, a potential reverse head and shoulders pattern may be intact
- There are two price gaps both below and above the current price level, ranging from $!35 to $244.


What We Believe

For the short term, a break and close above the descending parallel channel is necessary for bullish confirmation. Then, a break of the Ichimoku cloud resistance - which we have failed to break through twice- is required for further bullish confirmation. Ultimately, a break and close above the 200 SMA would confirm a further rally up to $244, where the price gap remains for the weekly chart.

Trade Safe.