Is 3M Finally Coming Out of Its Long Winter of Declines?
Let's check the charts after the company's double beat Tuesday morning.
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3M Co. MMM reported its latest quarterly figures Tuesday morning, posting non-GAAP earnings per share of $2.39, which beat Wall Street expectations by $0.28, and adjusted revenue of $7.7B, which beat estimates by $40M.
Let's check out the charts and indicators.
In the daily bar chart of MMM, below, I can see that the shares have traded sideways the past year between the $74-$72 area on the downside and the $94 area on the upside. MMM now trades above the rising 50-day moving average line and the rising 200-day moving average line.
Trading volume has jumped around in recent months but does not show me a clear pattern of expansion. The On-Balance-Volume (OBV) line shows us a decline into February followed by a shift to the upside telling us that traders are now being more aggressive buyers.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but correcting. If MMM maintains its early gains we could see the MACD oscillator give us a fresh buy signal.
In this weekly Japanese candlestick chart of MMM, below, I can see that the shares made a long decline followed by a moderate sideways or basing pattern. MMM is now above the 40-week moving average line largely because prices moved sideways.
The trading volume shows a slight increase in recent months and the OBV line also shows some improvement since February. The MACD oscillator has struggled but is now back above the zero line. The shares may encounter some resistance in the $100-$110 area.
In this daily Point and Figure chart of MMM, below, I can see an upside price target in the $112 area.
In this weekly Point and Figure chart of MMM, below, I can see a price target in the $122 area.
Bottom-line strategy: In my March 12 review of MMM I recommended that traders keep their powder dry and let MMM build out its base. The base is moving along so aggressive traders could now probe the long side of MMM in the $94 area risking to $86 for now.
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