Trade Strategy for 3M After Big Boost Hits Price Target
Shares of 3M are up significantly today and a new trade opportunity has emerged.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
On Friday morning 3M (MMM) beat Q2 earnings estimates and raised their FY2024 profit outlook. Prices soared higher.
I reviewed MMM on July 10, 2024 and I included a link to an earlier review where I wrote that, in late June, "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."
MMM reached my $120 price target today, so let's check the charts one more time.
In this updated daily bar chart of MMM, below, I can see that prices inched slowly higher the past two months before today's upside gap. Prices are trading above the rising 50-day moving average line and above the rising 200-day line. The On-Balance-Volume (OBV) line has been rising since early March and tells us that buyers of MMM have been more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator has turned higher from above the zero line — this is a new outright buy signal.
In this weekly Japanese candlestick chart of MMM below, I have to imagine today's strong gains as the chart will not be updated until the close of trading today. Prices have moved up from the base pattern we have pointed out in previous reviews. MMM is trading above the rising 40-week moving average line. The weekly OBV line is strengthening and the MACD oscillator is bullish.
In this daily Point and Figure chart of MMM below, I can see that prices reached our $120 price target.
In this weekly Point and Figure chart of MMM below, I can see a potential upside price target in the $167 area.
Bottom line strategy: Sometimes you want to press your position and sometimes you want to play with the house's money. Traders who are long MMM from lower levels could nail down some profits now that our $120 price target has been reached.
Sideways price action is now expected for a while. Prices may reach our next Point and Figure target of $167 but it will probably take awhile.
Employees of TheStreet are prohibited from trading individual securities.