4 Trade Ideas for 3M: Bonus Idea

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

3M, $MMM, made a last leg lower at the start of the year, finding a bottom in March. It reversed from there, making a higher low and then a higher high in June. It has been in consolidation since then. The resistance has been at a range that has held the stock since February and it ended last week back at the top of that range. The RSI is rising in the bullish zone with the MACD moving higher and positive.

The SMA’s have converged, often a point where a big move starts. There is resistance at 167.25 and 171.75 then 175.75 and 181.75. Support lower comes at 163.50 and 161 then 156.50 and 151.50. Short interest is low at 1.2%. The stock pays a dividend with an annual yield of 3.54% and begins trading ex-dividend on Friday. The company is expected to report earnings next on October 27th.

The August options chain shows clumps of open interest at the 155 and 150 strikes on the put side and a larger cluster from 160 to 175 on the call side. September options range from 125 to 160 on the put side with spikes at 130 and 150. On the call side it is largest at 160 and tails higher to 180. The October options have biggest open interest at 150 and lower at 130 on the put side and then from 165 to 175 on the call side. Finally the November options, covering the next earnings report, have open interest spread from 130 to 165 biggest at 145 on the put side. The call side builds to a peak at 165.

3M, Ticker: $MMM

Trade Idea 1: Buy the stock on a move over 167.25 with a stop at 161.

Trade Idea 2: Buy the stock on a move over 167.25 and add a September 165/160 Put Spread ($2.35) while selling an October 180 Call ($1.60).

Trade Idea 3: Buy the November 170/September 175 Call Diagonal ($6.25) and sell the October 150 Puts ($2.20).

Trade Idea 4: Buy the November 145/170/180 Call Spread Risk Reversal (75 cents).

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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 heading into the August options expiration, sees equity markets hit a speed bump and have stalled.

Elsewhere look for Gold to continue to consolidate the uptrend while Crude Oil slowly rises in consolidation. The US Dollar Index marks time as it digests the recent drop while US Treasuries pullback in their uptrend. The Shanghai Composite looks to continue to consolidate in its uptrend while Emerging Markets pause over resistance in their own move higher.

The Volatility Index looks to continue the slow creep lower making the path easier for equity markets to the upside. Their charts look strong on the longer timeframe, but with some indecision candles this week suggesting a pause or digestion possible. On the shorter timeframe the IWM, QQQ and SPY look to be in consolidation mode for the time being. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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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