4 Trade Ideas for 3M: Bonus Idea

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

3M, $MMM, peaked in May and started to roll lower. It finally found support after a gap down in February that had it retrace 61.8% of the rise from the pandemic low in March 2020. It has consolidated there for a month and is now at resistance at that 61.8% retracement level. The momentum is diverging higher with the RSI rising through the midline and the MACD climbing but still negative. The Bollinger Bands® are also shifting higher after squeezing.

There is resistance at 151 and then 155.50 followed by 160 and 162.50 before 169 and 172.50 with the big volume shelf at 174. Support lower comes at 147 and 143.50 then 140. Short interest is low at 1.8%. The stock pays a dividend with an annual yield of 3.96% and has traded ex-dividend since February 17th. The company is expected to report earnings next on April 25th.

The April options chain has biggest open interest at the 145 and 155 put strikes and on the call side at 150 and 155. In the April 29 Expiry chain activity is small but centered on the 145 put and 150 call. In the May chain the 135 and 140 put strikes and the 150 call strike stand out. Finally in June the 160 and 140 put are dwarfed by the open interest at the 160 and 165 call.

3M, Ticker: $MMM

Trade Idea 1: Buy the stock on a move over 151 with a stop at 147.

Trade Idea 2: Buy the stock on a move over 151 and add an April 29 Expiry 145/140 Put Spread ($1.40) while selling the June 165 Call ($1.25).

Trade Idea 3: Buy the April 29 Expiry/June 160 Call Calendar ($1.80) and sell the April 29 Expiry 140 Put ($1.45).

Trade Idea 4: Buy the June 140/155/170 Call Spread Risk Reversal (30 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 last week of the 1st Quarter, saw equity markets showed some strength in the face of increasing expectations for Fed moves and aggressiveness as well as continued war in Ukraine.

Elsewhere look for Gold to continue its move higher while Crude Oil also rebounds to the upside. The US Dollar Index continues to drift to the upside while US Treasuries pullback in their downtrend. The Shanghai Composite looks to continue the short term move lower while Emerging Markets may resume the downtrend.

The Volatility Index has made a return to normal levels making the path easier for equity markets to the upside. The charts of the SPY and QQQ look strong, especially on the longer timeframe. On the shorter timeframe both are close to confirming reversals to the upside. The IWM remains in its old pattern of consolidation, just in a lower range. 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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