4 Trade Ideas for 3M: Bonus Idea

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

3M, $MMM, comes into the week approaching resistance at what was prior support. This coincides with the 50 day SMA. It is also over the 200 day SMA. The Bollinger Bands® have squeezed in, often a precursor to a big move. It has a RSI rising off the midline with the MACD negative but rising toward zero. There is resistance at 143.50 and 148 then 150.50 and 153.50 before 155.50 and finally 162.50 from 2021. Support lower is at 139 and 135.50. Short interest is low at 1.9%. The stock pays a dividend with an annual yield of 2.06% and has traded ex-dividend since February 14th.

The company is expected to report earnings next on July 24th. The May options chain shows biggest open interest at the 140 and 145 put strikes, and at 150 then 140 on the call side. The June chain has biggest open interest at the 110 and then 115 put strikes, and from 150 to 160 on the call side. The July chain has biggest open interest at the 130 put strike and sees it spread from 130 to 175 on the call side. Finally, the September chain, the first to cover the next earnings report, show little open interest on the put side, but enormous size at the 125 call strike.

3M, Ticker: $MMM

Trade Idea 1: Buy the stock on a move over 144 with a stop at 138.

Trade Idea 2: Buy the stock on a move over 144 and add a June 140/130 Put Spread ($3.00) while selling the September 165 Calls ($2.55).

Trade Idea 3: Buy the June/July 150 Call Calendar ($1.60) while selling the June 130 Put ($1.60).

Trade Idea 4: Buy the September 125/145/160 Call Spread Risk Reversal ($2.00).

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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 that saw with April in the books and the FOMC meeting next week, equity markets signaled that the bottom is in for this correction.

Elsewhere look for Gold to continue to digest its historic move higher while Crude Oil resumes a new downtrend under support. The US Dollar Index remains in a short term downtrend, failing to continue a reversal, while US Treasuries consolidate the downtrend. The Shanghai Composite looks to continue to consolidate in a tight range while Emerging Markets are poised for more upside in broad consolidation nearing resistance.

The Volatility Index looks to remain slightly elevated but moving lower making the path easier for equity markets to the upside. Their charts show short term strength on both timeframes. On the shorter timeframe the IWM, the QQQ and the SPY are breaking short term resistance on a shift to bullish momentum. On the longer timeframe the classic “V” recovery is showing up in all 3 Index ETFs. 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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