The producer of the well-know Post-it Notes and the Scotch Tape, the 3M Co (NYSE: MMM), delivered its 2020 Q4 earning results today. The company showed an increase in its net income and sales, boosted by the production of protective equipment for hospitals and medical staff, due to ongoing requirement for those goods during the pandemic. The stock of the iconic company, which is also known for producing other famous brands such as Nexcare and Command, has been declining since February 2018. It took a strong hit during the February/March 2020 market slide, but managed to recover somewhat after that. MMM is now balancing above a medium-term upside support line drawn from the low of July 31st, 2020. That said, from the end of November, the share price is trading below a short-term downside resistance line taken from the high of November 27th. Although today’s results could attract some buying interest, for now, we will take a neutral approach and wait for a violation of one of those lines, before examining the next directional move.
If MMM makes a move higher, breaks the aforementioned downside line and then climbs above the 175.55 barrier, marked by the high of January 6th, that could attract more buyers into the field. The stock might then travel to the 177.44 obstacle, or even to the 179.60 hurdle, marked by the highest point of November. Initially, the price may get a temporary hold-up around there, but if the stock is still attractive to new buyers at that price, this might result in a move to the 182.55 level, which is the highest point of 2020.
The RSI remains fractionally above 50, while pointing higher, this way indicating the rising speed of the price. That is in line with our upside scenario. However, the MACD, despite pointing slightly higher and sitting above its trigger line, remains below zero. The MACD supports the idea of standing pat for now and waiting for a violation of one of the above-mentioned trendlines first.
Alternatively, if the share price falls below the previously-discussed upside line and then slides below the 163.43 zone, marked by the current lowest point of January, that could open the way for a further decline. The stock might drift to the 160.00 obstacle, a break of which may set the stage for a move towards the lowest point of October 2020, at 156.26.
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