3M heads into fourth-quarter earnings Tuesday with plenty of room to rally
3M (MMM) is a Dow stock worth noting. The industrial company behind iconic brands such as Post-it Notes and Scotch Tape as well as one of the largest makers of protective healthcare gear and masks has been on a slow and steady rise going back to its 2023 lows. For traders looking for action and volatility, you rarely get it in 3M. The stock is up 23.5% over the last 52-weeks. Technically, it’s just getting started and is now coming into an interesting – and tradeable – inflection point. That inflection point is a key resistance level at $172. The catalyst that could help it break out is next Tuesday’s fourth-quarter earnings. Over 3M’s last 10 earnings reports, shares have rallied seven times with an average gain of 8.3%. The three times it fell the average drop was -5.6%. Overall, the average move post earnings is +/- 4.1%. The technical set-up is for the bull run to continue over the long-term. If you are in the name, stay with it. I’ll show you why with a multi-year chart in a minute. However, there are two charts worth showing that reflect good buying opportunities for both the swing trader and the long-term investor. The near-term setup After its October earnings report, the stock rallied from roughly $155 to $166 then peaked at $172. Since then, shares have been trading sideways in a range between $160-$170, dancing around the stock’s 50-day moving average. We have a clear area of support and resistance in this range, but momentum is starting to turn more bullish. On the one-year daily chart above, the Moving Average Convergence Divergence indicator ( MACD ) has flashed a buy signal and the Relative Strength Index ( RSI ) has broken its downtrend. If shares can gap above $172, look for a new leg higher. Once above $172, that old resistance level should act as support. A run to $190 over the short term is likely. Further upside to $210 is a realistic target over the next few months. If you’re skittish about buying a stock ahead of earnings or think it’s going to sell-off, I get it. If price doesn’t continue higher this time, it still looks like a great buy and quite healthy over the longer term. In the event of a pullback, there are two key areas of support that may be tough to crack. Watch the $160 level again on a dip. Buyers have been quick to act here. It has acted as support when tested from above. The old ceiling has now become the floor. Sitting just below that area is the rising 200-day moving average at $154. A more dramatic sell-off gives one a phenomenal risk/reward entry point on a more severe dip. The long-term setup When we back this out a decade, as demonstrated on this weekly chart below, it gives us a great perspective of how significant recent price action is and shows there is room to run higher. We have a clearly broken downtrend going all the way back to its all-time highs set in 2017. Not only did it end its eight-year downtrend, it did so with a near textbook saucer bottom breakout. From this perspective, we have clear risk/reward parameters. Use the $150/$155 area to set stop losses. If it fails to hold here the trade is broken and we can revisit later. However, upside minimum targets of $210 should be achievable. That would bring shares back to 2021 levels. Seeing the rebound and knowing 3M’s leadership within the Industrial sector, it’s not out of the realm of possibility that a run back to all-time highs within the next 12-18 months is too bold of a call. Value over growth continues to be an early theme of 2026 and MMM is emblematic of this rotation. — Jay Woods, CMT with Chase Games DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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