3M Co (NYSE:MMM) is collapsing today, dropping to $180.14 -1.28 (-0.71%). This is following an all-time high yesterday. While most investors marvel at the stock move and want to buy, it is probably one of the freakin' biggest shorts or sells out there in the universe. There are so many negative indicators on all time frame that I literally get excited (in more ways than one) when I look at it. Let's go over it.
1. There was a bull flag on the daily chart going into yesterday. This normally signals significant further upside. Yesterday, the stock surged early, then gave up 100% of the move to close flat. Technical traders understand this signals a failed breakout. Failed breakouts usually result in a significant sell signal. Coming off all-time highs, this could mean a multi-year high and 20% correction in the next six months.
2. The weekly chart has a 3 bar surge. Three bar surges on any charge usually signal a pull back is on the horizon. However, a weekly three bar surge, coming at all-time highs can mean a multi-year high pivot is in place.
3. The monthly chart on 3M has seven green candles higher. This means that for seven months, the stock traded up. For hardcore InTheMoneyStocks PPT Methodology investors, this is insanely significant as it shows a 95% chance of a drop in the stock when matched with all the other signals discussed.
4. Lastly, on the monthly chart, connect the highs from 2003 to 2014-2015. If you extend the trend line it hits the highs on the chart perfectly. This is just one more epic sell signal for $MMM
By Pro-Trader
Gareth Soloway
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