MMM closes within previous day's range
3M Company (MMM) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MMM finished Wednesday at 169.51 gaining $2.94 (1.77%), significantly outperforming the Dow Indu. (0.13%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MMM as at Sep 16, 2020):
Wednesday's trading range has been $3.59 (2.14%), that's slightly above the last trading month's daily average range of $3.32. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MMM. Prices continued to consolidate within a tight trading range between 166.17 and 171.10 where it has been caught now for the last three trading days.
Unable to break through the key technical resistance level at 169.54 (R1), the market closed below it after spiking up to 171.10 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
Crossing above the upper Bollinger Band for the first time since Monday, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 165.05 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on Monday, MMM actually lost -1.12% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 166.17 where further sell stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for 3M. Out of 650 times, MMM closed higher 52.92% 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 59.69% with an average market move of 0.29%.