On September 04, 2022 (see Global Financial Engineering Weekly Commentary for 3M Co.( $MMM) by Dr. Glen Brown – Global Financial Engineering, Inc ), We wrote:
Dark days might be ahead for 3M Co.( $MMM)! The company filed for bankruptcy for Aearo Technologies, a subsidiary that once made the earplugs, as a way to fence off the litigation from the rest of 3M.
We will attempt a Bearish 3M Co.( $MMM) trade based on the current bearish market structure as shown on the Global Algorithmic Trading Software (GATS) #5 with potential trade entry signal as follows:
Global Potential Trade Entry Signal #1:$121.33
Global Maximum Catastrophe Hard Stop Loss GAP:7×3.4024)=$10.21
Global Maximum Catastrophe Trailing Stop: 7×3.4024= $10.21
Global Maximum Profit Target: 3 x $10.21 = $30.63
Global Take Profit Target = $121.33 – $30.63 = $90.70
Current Price as of September 03, 2022: $121.34
We could see the MMM trading at $90.70 within a few weeks!
Today October 09,2022 3M Co.( $MMM) is trading at $107.50 just about $17.00 away from our first target.
The big question is what is the Projection low from this Current Market Price(CMP) of $107.50
We can use the Global Algorithmic Fair Value Model (GAFVM) to extract the data for our Global Forecast Price Projection Model(GFPPM).
The Global Algorithmic Fair Value Model (GAFVM) gives us three(3) values namely: Upper Fair Value(UFV), Mid Fair Value(MFV), and Lower Fair Value(LFV).
These values are then incorporated into our Global Forecast Price Projection Model(GFPPM).
Our Forecast Price Projection is derived from the following formulae.
Projection Low = Current Market Price(CMP) – ((Upper Fair Value(UFV) – Current Market Price(CMP))
Projection High = Current Market Price(CMP) + ((Current Market Price(CMP) – Lower Fair Value(LFV))
Our Global Valuation Gap(GVG) is the difference between the Current Market Price(CMP) and Upper or Lower Fair Value.
At this date our Global Algorithmic Fair Value Model (GAFVM) indicates the following 3M Co.( $MMM):
Upper Fair Value(UFV) = 144.72, Mid Fair Value(MFV) = 143.16 and Lower Fair Value(LFV) = 141.64
Based on the above, we can calculate the potential low for 3M Co.( $MMM) using the Current Market Price(CMP)= $107.50.
3M Co.( $MMM) Price Projection Low = Current Market Price(CMP) – ((Upper Fair Value(UFV) – Current Market Price(CMP))
3M Co.( $MMM) Price Projection Low = 107.50 – ((144.72 – 107.50))= 107.50 – 37.22 = 70.28
From the above, we at Global conclude that there is a high probability that we could see 3M Co.( $MMM) trading at $70.28 in the near future.
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