EARN25

3M Stock Breaks Above Key Level on Heels of Bull Note

Calls have been popular among 3M options traders

Managing Editor
Dec 23, 2019 at 10:12 AM
facebook X logo linkedin


Manufacturing name 3M Co (NYSE:MMM) is enjoying a 0.9% lift this morning -- a reaction to the surprise bull note out of J.P. Morgan Securities. The firm upgraded MMM to "neutral" from "underweight," and hiked its price target to $150 from $143, though this still represents a 14% downside to Friday's close. Despite being in the midst of a lawsuit regarding water contamination with its polyfluoroalkyl substances (PFAS), J.P. Morgan Securities sees MMM as stable, with potential growth stemming from its electronic business. Coming into today, all 12 covering analysts sport a "hold" or "strong sell" recommendation.

Now trading just above the $177 mark, 3M stock is extending its breakout above the $172 ceiling, while also easing up on its 7% year-to-date deficit. The 50-day moving average has emerged as a cushion of support for the shares of late, capturing multiple pullbacks since mid-October.

Data at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a preference of calls over puts, per the equity's 10-day call/put volume ratio of 2.03, and ranks it in the 85th percentile of its annual range. In simpler terms, calls have been purchased over puts at a faster-than-usual clip. 

Short-term options premiums on 3M stock look relatively cheap at the moment, based on the equity's Schaeffer’s Volatility Index (SVI) of 18%, which ranks in the 14th percentile of its annual range, meaning those looking to speculate on MMM with options, should do so now. Plus, 3M's Schaeffer's Volatility Scorecard (SVS) sits at 80 (out of 100), indicating the equity has tended to exceed option trader's volatility expectations during the past year. 

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!