Stock of the day: 3M

The new week starts with the analysis of the 3M company. At the current moment, 3M is this kind of company, where we do not have a clear, directional movement and the price is moving sideways. Luckily for us, it is not just a random time of low volatility but a technical correction, which makes trading a little bit easier.

3M is currently inside a flag pattern. This particular flag is a bullish correction inside of a bigger down trend. In theory it promotes the breakout to the downside. Can that flag be reliable? You can see that with the red lines, I have previously highlighted two corrections: a pennant and a wedge. They worked flawlessly, so we can assume that this particular instrument has no problems with respecting those patterns. 1:0 for the sellers.

Only the fact that the price is inside of the flag is not enough to sell. A sell signal in those cases is triggered, when the price breaks the lower line of this formation, so the bears should wait for that first. What are the other bearish factors here?

One of them is the fact that the price is below the crucial horizontal resistance of 186 (green). Actually, this line will be extremely important for the situation on 3M. As long as the price stays below the level, as we said, sellers are winning. The negative sentiment will be overthrown, when the price comes back above the green resistance. Chances for that are now limited but such the7 option always exist.