SIA Chartsā Relative Strength rankings not only help investors to identify which stocks in a universe are outperforming and underperforming against their peers, but also when relative performance trends are changing.
We highlighted the long-term perennial underperformance of 3M Company (MMM) back in the December 15, 2023 edition of the Daily Stock Report, and since then, the stock is down 12.1%, while the S&P 100 Index is up 12.2% over the same period. The shares have been stuck in the Red Unfavored Zone of the SIA S&P 100 Index Report since April of 2019 and have been out of the green zone since April of 2018.
Yesterday, 3M completed the spinoff of its healthcare division into a separate company, and the stock jumped 6.0%.
While MMM remains in the Red Unfavored Zone of the SIA S&P 100 Index Report, by jumping 17 spots to 75th place, it has broken out of a relative strength downtrend and reached its highest rank since August of 2021, and its SMAX score increased to its highest level since September of 2021. A major breakout is underway in 3M Company (MMM) shares, which have ended a long-term downtrend, broken out of a base, and signaled the start of a new recovery trend.
After steadily sliding for two years, between early 2021 and early 2023, MMM shares spend the last year trending sideways between $70.00 and $90.00 building a base for recovery. Yesterday, MMM staged a breakaway gap and jumped above $90.00 for the first time since January of 2023, completing bullish Head and Shoulders base and Ascending Triangle patterns to signal the start of a new uptrend.
Initial upside resistance may emerge near the $100.00 round number, followed by the $110.00 to $115.00 area where a measured move and previous highs converge. Initial support moves up to the $90.00 breakout point from $80.00.
For over five years, 3M Company (MMM) shares had been under distribution, steadily retreating in a falling channel. This now appear to be over with a big breakout signaling the start of a new uptrend.
Yesterdayās rally by MMM shares up through $90.00 not only completed a bullish Spread Triple Top pattern, it snapped a long-term downtrend line dating back to the February 2018 peak, a technically significant upturn.
Horizontal and vertical counts suggest upside resistance may emerge in the $109.30 to $115.95 zone. Initial support appears near $86.15 based on a 3-box reversal.
With its bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) increasing to 8 out of 10, MMM is exhibiting short-term strength against the asset classes.
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