MMM closes within prior day's range after lackluster session
3M Company (MMM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
MMM ended the week 0.58% higher at 161.01 after gaining $1.25 (0.78%) today, outperforming the Dow Indu. (-0.09%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $1.03 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MMM as at Feb 14, 2020):
Friday's trading range has been $2.32 (1.45%), that's below the last trading month's daily average range of $3.21. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for MMM.
After moving lower in the previous session, the share managed to close higher but below the prior day's open, forming a bullish Harami Candle.
After trading down to 158.82 earlier during the day, the stock bounced off the key technical support level at 158.87 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Monday, MMM gained 1.44% on the following trading day. After having been unable to move lower than 159.00 in the previous session, 3M found buyers again around the same price level today at 158.82.
While MMM is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 156.38, downside momentum might accelerate should the market break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Harami Candle" stand out. Its common bullish interpretation has been confirmed for 3M. Out of 32 times, MMM closed higher 62.50% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 68.75% with an average market move of 0.90%.