3M Company (MMM) ($132.27, down 5.7% YTD): The multi-sector conglomerate and Dow component traded to an all-time intraday high at $140.34 on Dec. 31, then traded as low as $123.61 on Feb. 3. It is currently just below its 21-day and 50-day SMAs at $132.53 and $132.69 and above its 200-day SMA at $123.39. The weekly chart is neutral, with its five-week MMA at $132.20 in a pattern that shows the stock trying to re-inflate a busted bubble. Weekly and semiannual value levels are $125.12 and $120.48, with a semiannual pivot is $130.25 and a quarterly risky level at $135.97.
Raytheon (RTN) ($100.96, up 11.3% YTD): The aerospace and defense contractor traded to an all-time intraday high at $102.15 on March 7. It is currently above its 21-day, 50-day and 200-day SMAs at $98.45, $94.32 and $81.47. The weekly chart is positive but overbought, with its five-week MMA at $97.11 in a pattern that I describe as a parabolic bubble. Quarterly and annual value levels are $86.61 and $82.01, with weekly and monthly risky levels at $103.12 and $105.54.
United Technologies (UTX) ($114.41, down 1.5% YTD): The multi-sector conglomerate and Dow component traded to an all-time intraday high at $118.42 on March 5, and is now between its 50-day SMA at $114.10 and its 21-day SMA at $115.77. The weekly chart is neutral, with its five-week MMA at $114.27 with declining stochastics in a pattern that appears like a parabolic bubble that is about to pop. Semiannual and annual value levels are $112.24 and $104.87, with a quarterly pivot at $113.70 and monthly risky level at $127.61.
Crunching the Numbers with Richard Suttmeier
There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.
Interpretations: (stocks below a moving average listed in red are below that moving average)
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (Even Apple declined to its 200-week SMA in June 2013.)
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance. I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (Even Apple tested or crossed its 200-day SMA in nine of the last 10 years.)
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff