4 Trade Ideas for 3M: Bonus Idea

• Posted by Greg Harmon
• on June 24th, 2019

Here is your Bonus Idea with links to the full Top Ten:

3M, $MMM, was moving higher over resistance that had held for 2 years when the stock gapped down in May. It continued to move lower, eventually undercutting the December low and bottoming at the end of May. Since then it has reversed and in its 2nd move to the upside. The Measured Move takes it to the December low. The RSI is rising toward the bullish zone with the MACD moving up towards a cross to positive. The Bollinger Bands® are open to allow more upside.

Another 38.2% retracement after reaching the Measured Move and the 3rd leg of a 3 Drives would suggest 182 as a target, right at the October low. There is resistance at 176.50 and 182 followed by 188.50. Support lower comes at 170 and 166.50 then 160. Short interest is low at 2%. The stock pays a dividend with a current annual yield of 3.32% and the company is expected to report earnings next on July 25th.

The July options chain shows highest open interest at the 200 strike call. On the put side it is distributed from 180 down to 155 but much smaller. The August options have biggest open interest at the 150 and 155 put, with smaller amounts from 170 to 190 on the call side. The September chain has biggest open interest at the 185 put then the 160 put. The call side sees open interest distributed from 170 to 200.

3M, Ticker: $MMM

Trade Idea 1: Buy the stock on a move over 174.50 with a stop at 170.

Trade Idea 2: Buy the stock on a move over 174.50 and add a July 26 Expiry 172.50/162.50 Put Spread ($3.20) while selling the September 185 Calls ($3.00) to fund the protection.

Trade Idea 3: Buy the July/August 180 Call Calendar ($2.60) and sell the July 165 Put ($1.10).

Trade Idea 4: Buy the July 26 Expiry 175/180 Call Spread and sell the July 26 Expiry 160 Put ($1.10).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with June options expiration complete, saw equity markets looking strong with 1 week left in the first half of the year.

Elsewhere look for Gold to continue in its uptrend while Crude Oil joins it moving higher. The US Dollar Index looks to continue to retrench lower while US Treasuries pause in their uptrend. The Shanghai Composite looks to continue its reversal higher while Emerging Markets continue their short term uptrend.

Volatility looks to remain low keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. Their charts all show strength on the longer timeframe. On the shorter timeframe the small caps appear to be weaker than the others though. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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