Johnson & Johnson (JNJ) was upgraded to a buy today by theStreet.com's quantitative service. Keeping this upgrade in mind I thought a look at the charts and indicators of JNJ is a good way to combine investment techniques.
In this daily bar chart of JNJ, below, we can see that prices for JNJ have been under selling pressure since late January. JNJ is below the declining 50-day simple moving average line and below the declining 200-day line. The pace of volume has declined from early February suggesting that selling pressure has diminished. In the bottom panel is the 12-day price momentum study which shows a pattern of rising lows from February to March to April. This is a bullish divergence when compared to the price action of lower lows from
In this weekly bar chart of JNJ, below, we have a mixed picture. Prices are below the declining 40-week moving average line. The weekly OBV line has been drifting slightly lower all year. The MACD oscillators is narrowing towards a go long buy signal.
In this Point and Figure chart of JNJ, below, we can see that there is a double bottom at $122. A rally above $134 is needed to turn this chart bullish.
Bottom line: A bullish divergence between the price action and the momentum indicator along with a quantitative buy recommendation is pushing me towards a buy signal. Traders could go long JNJ on strength above $128 and $130. Risk to $120.