3M Co. (MMM) is in a downtrend on the charts but the daily and weekly On-Balance-Volume (OBV) lines show a bullish pattern. Let's dig deeper on the charts today after of the release of their earnings numbers this week.
In this daily bar chart of MMM, below, we can see prices in a downtrend - lower lows and lower highs going back to last February. The bearish 200-day moving average line has acted as resistance a number of times last year. Another test of the 200-day line could happen in the month ahead if MMM can mount a rally.
The volume pattern is interesting in that volume spikes can be seen at a number of price lows since April - it looks like heavier selling is being absorbed by other investors.
The daily On-Balance-Volume (OBV) line shows a rise from early May. A rising OBV line is a sign of aggressive volume and usually parallels price rallies. A rising OBV line in a downtrend is unusual and could be suggesting that buyers have been active for much of the decline.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is just at the zero line and crossing the line would be a buy signal.
In this weekly bar chart of MMM, below, we can see a mixed picture. MMM is in a downtrend with prices below the declining 40-week moving average line but a weekly close above $200 would break that indicator.
The slope of the weekly OBV line is positive and its new high for the move up suggests that buyers of MMM have been more aggressive.
The weekly MACD oscillator is poised to cross to the upside to a weekly cover shorts buy signal.
In this Point and Figure chart of MMM, below, we can see an upside price target of $213. A rally to $213.80 would be a double top breakout and could open the way to further gains.
Bottom line strategy: Prices may not be as strong as I would like but the strength in the OBV lines suggest significant price strength ahead. Probe the long side here and risk below $185.