Shares of 3M have made a dramatic return to the Favored Green Zone of the SIA S&P 100 Index Report after being entrenched in the Unfavored Red Zone for over 6 years, dating back to 2018. During this period, 3M shares yielded minimal returns, with a 5-year rate of return of +0.85% and a dividend yield of 2.24%, while the S&P 100 Index delivered a return of +13.04% annualized. From its peak in early 2018 at $170, 3M shares fell over $100 per share, trading as low as $68 in late 2023, remaining deeply entrenched in the Unfavored Red Zone. However, the first half of 2024 has seen a turnaround, with 3M shares attacking resistance levels aggressively. Notably, shares surged over 23% in a single day following news of substantial free cash flow, surprising investors. The key question now is whether this stock price surge is sustainable and if it marks the beginning of a new era of leadership for this $68 billion giant. SIA Chartsā relative strength rankings help investors identify stocks outperforming their peers or index benchmarks. Outperformance often reflects improving expectations for the company's or sectorās growth. In the case of 3M, our main indicatorārelative strengthāis now giving a green light, as MMM is positioned at #10 on the SIA S&P 100 Index Report, ranking above prominent names like Eli Lilly and Booking Holdings, and alongside companies like Apple, Netflix, and Costco. To contextualize this rally, we examined the monthly candlestick chart of MMM to understand the latest significant candle within its trading range. This long-term chart reveals declining tops from 2018 and again in 2021, forming a consolidating wedge that points to long-term resistance at $130 and support at $70. Even Friday's rally aligns with this long-term wedge formation, suggesting that the battle for price discovery will continue within this consolidation pattern.
For more precise support and resistance levels, we refer to our point and figure (P&F) chart, overlaid with colors indicating 3Mās matrix position over time. After spending years in the Unfavored Red Zone, this stock has recently shown remarkable performance, with shares up +40.01% YTD and a +22.48% gain in the past month alone. The P&F chart highlights resistance levels that MMM will need to overcome as it aims to regain market leadership. Initial resistance is around the current level of $127.34, with additional resistance at $149.20 and $171.39 (2018 high). Support is initially at the 3-box reversal level of $115.34, with further support zones just below the whole number $100 at $96.51 and $89.16. With a perfect SMAX score of 10 out of 10 (a short-term indicator comparing an asset across various asset classes), 3M Company is demonstrating strong short-term performance across all asset classes.
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