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. Five years to the day from the last time 3M (MMM) dropped into the red zone, and over six years since it fell out of the green zone of the SIA S&P 100 Index Report, MMM finally climbed back up into the Yellow Neutral Zone after moving up 40 spots in the last month. During the five years it spent stuck in the red zone, 3M shares fell by 9.1%, while the S&P 100 Index gained 13.1%, reminding investors that relative strength analysis enables investors to avoid short and long-term underperformers. In the last month as it started to climb up out of the red zone, MMM gained 3.0% while the S&P 100 Index lost 3.2%. A major breakout is underway in 3M (MMM) shares this month. Long-term downward momentum started to slow about a year ago, and a multi-year downtrend finally bottomed out back in October. Since then, the shares have been building a base for recovery in the $70.00 to $90.00 range. Earlier this month, MMM broke out over $90.00 to complete a big base and a Bullish Ascending Triangle. Initial upside resistance appears near the $100.00 round number, followed by $110.00 based on a measured move. Initial support has emerged near the $90.00 breakout point.
A long-term downtrend in 3M (MMM) shares has come to an end. This month, MMM has staged two major breakouts over $90.00, which snapped a long-term downtrend line dating back to early 2018, and completed a bullish Spread Triple Top pattern. Combined, these breakouts signal a major directional change and the start of a new recovery trend. Initial upside resistance appears near $100.00 where a round number and a 45-degree downtrend resistance line converge, followed by the $105,00 to $109.25 area where previous column highs/lows and horizonal counts converge then $115.95 based on a vertical count. 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 a perfect 10 out of 10, MMM is exhibiting short-term strength across the asset classes.
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