MMM slips to lowest close since October 2nd
3M Company (MMM) Technical Analysis Report for Oct 27, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, MMM ended Tuesday at 161.04 tanking $5.12 (-3.08%) on high volume, strongly underperforming the Dow Indu. (-0.8%) following today's earnings report. This is the biggest single-day loss in over a month. Today's close at 161.04 marks the lowest recorded closing price since October 2nd. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 164.39, the market confirmed its breakout through the prior session low after trading up to $3.74 below it intraday.
Daily Candlestick Chart (MMM as at Oct 27, 2020):
MMM reported earnings of $2.43 per share before today's market open. With analysts having expected an EPS of $2.27, 3M Company beat market expectations by 7.0%. The company's last earnings report was released on July 28, 2020, when 3M Company reported earnings of $1.78 per share failing market expectations by -0.6%.
Tuesday's trading range has been $4.33 (2.63%), that's far above the last trading month's daily average range of $3.34. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MMM.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 158.04 (S1). The share closed below the 100-day moving average at 161.50 for the first time since May 26th. When this moving average was crossed below the last time on January 28th, MMM lost -2.16% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
As prices are trading close to October's low at 156.25, downside momentum could accelerate should 3M mark new lows for the month.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for 3M. Out of 20 times, MMM closed higher 65.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 65.00% with an average market move of 0.61%.