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Fan Yang

3M Company (MMM) in a Bullish Continuation Breakout Attempt

3M $MMM has been in correction mode since early 2018 when price almost reached $260 per share. It fell to a low just under $180 per share in late 2018, but has since recovered. If we look at the daily chart below, we can see that price action has shifted from a bearish trend to a more neutral-bearish, consolidation mode since mid-2018. But now, we could be looking at a shift into a bullish trend.

MMM Daily Chart


(click to enlarge)

Bullish Continuation Breakout:
- We are seeing price push above its September 2018 high. This high represents the high point within a consolidation pattern.
- A break above $217.50 therefore should be a sign that the market is in bullish continuation mode.
- Note that price has already broken above the cluster of moving averages and then bounced off this cluster as support. This is known as a bullish slingshot signal.
- Furthermore, we saw the RSI already tag 70 and then hold above 40 after pulling back. This shows development of bullish momentum.
- Finally, we already saw price break the $212 pivot, which killed the pattern of lower highs.
- We can see on the weekly chart that the prevailing trend heading into 2018 was bullish. Price is still above the 200-week simple moving average. 
- The weekly RSI held above 40 for the most part, which reflects maintenance of the prevailing bullish momentum.
- If price can close above $218 this week or the in the coming week, MMM would be opening up the $250-$260 area again.
- The $195-$200 level is a key support. A break below this area would make me reassess this bullish continuation outlook.

MMM Weekly Chart

(click to enlarge)

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