Since the last days of December, 3M (NYSE: MMM) has been on a steep up-move, forming higher highs and higher lows. Looking at the 4-hour chart of 3M, the stock keeps trading above a short-term upside support line drawn from the low of December 26th. Certainly, the share price does have some potential to travel a bit higher, but before we get comfortable with that idea, we would like to see a break through the 210.40 barrier first. This is why, for now, we will remain cautiously-bullish.
A break above the 210.40 level could allow the bulls to target the next potential area of resistance, at 214.57, marked by the high October 8th. We may see the price getting held near that zone, or even retracing slightly lower. But as we said before, as long as the previously-mentioned short-term upside support line continues to hold, we will aim higher. If the buying of the stock doesn’t stop, this investor confidence might result in MMM testing the next possible resistance zone at 217.24, which is near the highs of September 21st and October 3rd.
Taking a quick glance at our oscillators, the RSI and the MACD are giving us mixed signals. The RSI continues to run above 50 but recently had slowed down its uprise. The MACD, even though is above zero, has shifted below its trigger line and is slightly pointing lower.
Alternatively, if the price suddenly reverses lower though, breaks the aforementioned upside support line and drops below the 206.16 hurdle, this might spook investors, at least for a short while. Such a move may put even more pressure on the stock, as it could then travel lower to test the 202.56 obstacle, or even the 201.09 zone, marked by the high of February 11th. At some point, we may see a small correction back up, but if investors won’t feel that 3M is worth even near the above-mentioned price tags, then a further slide may take the share price to the 197.80 level, which is the low of February 8th.
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