9/30/2018 – Stock Chart Analysis for 3M Corporation (MMM)
3M Corporation (MMM)
This update will focus on any long-term trends or chart patterns for 3M Corporation (MMM). MMM was one of a few different requests last week. The 3M Corporation makes a range of products, ranging from adhesives & post-it notes to automotive and industrial cleaners.
Without realizing it until I was researching and writing this article, I use a ton of 3M products. I use their cleaning products on my bass boat, tapes, post-its, scotch write scrub pads, and the list goes on.
To browse all of 3M's products, click on the images below and the link will take you to the 3M's official website.
3M's tag line is "We Apply Science to Life". Maybe I should change the Trendy Stock Charts tagline to something similar...."I Apply Technical Analysis to Charts". Or then again, maybe I shouldn't change anything. The new tagline just doesn't carry the same emphasis as "It's All About the Trend".
Speaking of trends, let's jump to the charts and see if the current trend(s) can be identified for 3M's share price. Off we go!
3M Corporation (MMM) - Bullish Impulse Wave Pattern
This first chart for 3M Corporation is a 20 year monthly candlestick chart. I've outlined a Bullish Impulse wave pattern that developed over a 9 year period. This wave pattern appears to have completed development in January 2018. MMM's share price is currently in a correction period. Some sort of corrective wave pattern needs to develop to complete the 8 wave process in the Elliott wave cycle. Wave A of a corrective type pattern appears to have completed and Wave B, a counter-trend wave, is currently in process of developing. The Doji candlestick that developed in September most likely represents the midpoint of the rebound.
There is one extremely important item I've learned over the years when applying Elliott wave theory. This important item was recently reinforced on a shorter-term basis for AMD. What is that important item?
Wave 5 in the above illustration for 3M contains the extended wave in this particular Bullish Impulse wave pattern. So what exactly is an extended wave pattern and what are the implications? Keep reading to find out!
MMM - Wave 5 Extended Wave Pattern
Statistically speaking, the most typical place for an extended wave pattern to develop in an Impulse wave pattern is in either Wave 3 or Wave 5. In the case for MMM's share price on the 20 year chart above, the extended wave pattern developed in Wave 5. The extended wave pattern is identified by the black trendlines in the blue Wave 5.
First off, let's review what an extended wave pattern is. Quite simply, an extended wave pattern is an identifiable Impulse wave pattern within a single wave of a larger Impulse wave pattern.
Being able to identify extended wave patterns can help the trading process immensely. An extended wave pattern that develops in Wave 3 or 5 provides a very specific price range and trading strategy to purchase or repurchase any previously sold shares. Depending upon which wave it develops in helps to determine the depth of the subsequent correction.
And while every Impulse wave pattern subdivides down into a smaller Impulse wave patterns, the key is to identify the "most clearly identifiable" Waves 1-5. That is Wave 5 for 3M's share price. When an extended wave pattern develops in Wave 5 of a Bullish Impulse wave pattern, the main support area for the ensuing correction is…….
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I review the probable price action for 3M Corporation's share price, both short-term and long-term.
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