MMM looks bad at the first glance, but another look offers a different story.
When looking at the Dow Jones Industrial Average stock 3M (NYSE: MMM), investors had a bit of a problem on the charts. After a new sale analysis, may the dog-like trend in 3M stock stay BFF with the bear? Or are we in for new lucrative starts for bulls?
Lots of stocks are in trouble due to the coronavirus and the uncertainties that firms are faced with. When you look at Delta Airlines or the Las Vegas Sands, you will see two giants hit hard.
Some blue-chip stocks in the Dow Jones are trying to adapt. Home Depot is one constant that has pricing charts showing a company trying to deduce how to serve clients during the Covid-19 craze. Microsoft is the biggest publicly traded firm on the market and can remain untouched at these happenings. But 3M is not that lucky.
So even though the respirator mask N-95 has been thriving during the pandemic, 3M saw its April sales fall by 11% as opposed to a year ago. The decline was worsened by softness in important parts like security, industrial, consumer, transport, electronics…
All of this was made public at the end of April when 3M withdrew its complete-year guidance. The top management reported that they will keep on informing investors on a month-to-month basis since there isn’t room for a long-term forecast. This caught Wall Street unprepared.
Their stocks went under to its worst rates as of the second half of March on Thursday. But, there was a rebound in the wider market from out-of-gate selling after back-to-back days taking profit assisted the rise in stocks far from intraday lows to close down only 0.75 percent.
Yet should you still buy 3M?
3M Stock Monthly Cost
The revenue near the end of the fourth month caused investors to bid up 3M stock for over 2.5% and cause a record for the past two months. This also caused a confirmation for a bullish month-to-month graph hammer candlestick that occurred for March’s wider marketplace correction.
The hammer is encouraged by the over 60% retracement level that dates back to the stock’s low during the previous financial crisis. The candlestick ended up just barely over the long-term line, which is positive. This shows a significant low after a 2-year bear market.
When you look at their chart reveals by month again, you will see an instant post-earnings bid that brought another possible lower high pattern in 3M stock’s current downward path. And that moment that saw the stock rise? It fumbled on the first obstacle. You’re not really dying to be among the buyers of their hammer.
At least their stock provides a pullback chance with uncertainty vs. incentive features. Shares go from 115-141 USD and over the line that held the body of April’s hammer. Some have pointed out to the bull-like crossover in the oversold area.
If you want to go this way, put a stop-loss lower than 129 USD. This will amount to around 5 percent of risk at the time of this writing. A profit of almost 20% is achievable and the risk moves considerably towards purchasing stock. Be sure that the dog-like trend doesn’t roll over. And that the exit will be effective if a bear-like April record high happens and MMM falls under the lower half of the underside of the hammer.