Yesterday, 3M showed a promising bullish reversal, signaling the potential for a buy signal. The price clearly respected the orange support area, which previously acted as a resistance in September and October, leading to a strong bullish bounce. This rejection of support indicates that the demand zone is still active, and buyers are defending this level.
Adding to the bullish scenario, the recent price action was trapped inside a flag pattern, marked by blue lines. A flag pattern is typically a trend continuation pattern, and in this case, the preceding trend was bullish, suggesting a breakout to the upside is likely.
The first step towards a buy signal has already been made with yesterday’s bullish bounce. The final confirmation of a long-term buy signal will occur if the price closes above the upper line of the flag, confirming a breakout and resumption of the bullish trend.
Traders should watch closely for this breakout, as it would provide a high-probability buying opportunity. On the other hand, if the price fails to break out and instead reverses back below the orange support, it would invalidate the bullish setup and suggest a continuation of the sideways trend.