MMM stuck within tight trading range
3M Company (MMM) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
MMM finished Tuesday at 151.21 gaining $0.80 (0.53%), slightly underperforming the Dow Indu. (0.62%). Trading up to $1.43 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 prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (MMM as at Aug 04, 2020):
Tuesday's trading range has been $1.58 (1.05%), that's far below the last trading month's daily average range of $2.77. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MMM. Prices continued to consolidate within a tight trading range between 148.80 and 151.75 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Takuri Line. The last time a Takuri Line showed up on June 22nd, MMM gained 0.73% on the following trading day.
After trading down to 149.66 earlier during the day, the share bounced off the key technical support level at 150.10 (S1). The failure to close below the support might increase that levels significance as support going forward.3M ran into sellers again today around 151.24 for the third trading day in a row after having found sellers at 151.42 in the previous session and at 151.75 two days ago.
Though the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the nearby swing low at 148.80 where further sell stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Takuri Line" stand out. Its common bullish interpretation has been confirmed for 3M. Out of 42 times, MMM closed higher 57.14% 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 71.43% with an average market move of 1.28%.