Investors looking at 3M's (MMM) - Get 3M Company Report daily and weekly technical charts know the stock has been moving higher since Aug. 24, the day of the China-induced flash crash low. The daily chart shows how a "death cross" confirmed on July 6 correctly tracked the stock lower. Today, the stock is well above its 50-day simple moving average and its weekly chart has been positive since the close on Oct. 9.
3M, maker of Scotch tape and Post-It notes, among many other industrial goods, is a component of the Dow Jones Industrial Average I:DJI . The stock, at $148, is down 9.9% year to date, putting it in correction territory. The Dow is down 3.3% for the same period.
Analysts expect 3M to earn $2.01 a share when the company reports before the opening bell on Thursday.
Zacks Equity Research rates the company a hold but indicates completing its acquisition of Polypore International (PPO) may result in an earnings beat. Of interest will be the $5 billion to $10 billion that has been set aside for additional acquisitions.
Here's the daily chart for 3M.
Courtesy of MetaStock Xenith
The daily chart shows 3M is in correction territory, down 13.2% below its all-time intraday high of $170.50 set on March 2.
The stock confirmed a "death cross" on July 6 when the stock closed at $155.08, making it vulnerable when the market dropped on Aug. 24. The stock gapped lower by 3.5% on that "Black Monday," trading as low as $134 and putting the stock briefing into bear market territory, down 21.4%.
The "death cross" occurred when the 50-day simple moving average fell below the 200-day indicating that lower prices lie ahead and thus this signal tracked the decline from $170.50 to $134. The stock is currently above its 50-day simple moving average of $143.84 and below its 200-day simple moving average at $156.61.
The horizontal lines are the Fibonacci retracements from the March 2 high to the Aug. 24 low. Shares of 3M are on the cusp of the 38.2% retracement of $147.93. Above is the 50% retracement of $152.25 and below is the 23.6% retracement of $142.59.
Here's the weekly chart.
Courtesy of MetaStock Xenith
The weekly chart is positive, with the stock above its key weekly moving average of $146.14 and well above its 200-week simple moving average at $123.97. The weekly momentum reading is projected to rise to 51.19 this week up from 40.73 on Oct. 16,
Momentum scales from 00.00 to 100.00, with a reading below 20.00 oversold and a reading above 80.00 overbought. This study is shown in red along the bottom of the chart.
The horizontal lines are the Fibonacci retracements of the bull market from the March 2009 low to the March 2015 high. The stock is above its 23.6% retracement of $139.64.
Investors looking to buy 3M should place a good till canceled limit order to purchase the stock if it drops to $145.69 and $144.45, which are key levels on technical charts until the end of this week and the end of October, respectively.
Investors looking to reduce holdings should place a good till canceled limit order to sell the stock if it rises to $175.69, which is a key level on technical charts until the end of 2015.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.