Even As 3M's Chief Financial Officer Pulls Away, We Should Stick to Our Plan

In my June 26 review of 3M MMM I wrote that "Traders who are long MMM should continue to hold those positions. Raise stops to $96 from $86. My price targets are $120 and then perhaps $174."

Now that 3M’s CFO resigned another review of the charts seems to be at the top of the list today.

In this daily bar chart of MMM, below, I can see that prices have pulled back to the cresting 50-day moving average line. The slower-to-react 200-day moving average line intersects around $87. The trading volume has been more active since late January. 

The On-Balance-Volume (OBV) line has been strong since early March to late June but has weakened recently. Have traders shifted from aggressive buying to aggressive selling? The trend-following Moving Average Convergence Divergence (MACD) oscillator has been correcting since April and is nearing the zero-line as the strength of the uptrend has been fading.

In this weekly Japanese candlestick chart of MMM, below, I see a mixed picture. Prices have made a bottom pattern over the past two years. The trading volume has increased in the past six months or so. The OBV line has turned higher since February. The MACD oscillator is above the zero line but narrowing in recent weeks suggesting that the trend strength is weakening.

In this daily Point and Figure chart of MMM, below, I can see a potential upside price target in the $120 area, but a trade at $94 would weaken this chart.

In this second Point and Figure chart of MMM, below, I used weekly price data. Here the software comes up with the same parameters of the daily chart above.

Bottom line strategy: I have no special insights on the management changes at MMM, so traders who are long MMM from my earlier recommendations could hold those positions with sell stops at $96.

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