Johnson & Johnson (JNJ) is one of members of the Dow Jones Industrial Average (DJIA) that actually looks like the chart of the DJIA. We last visited with JNJ in late April, when we concluded that, "it is hard to say when JNJ will resume its uptrend, so I would only look to buy strength. Traders could go long on gains above $128 and then risk a close below $122. The low $160s is our price target after we break out on the topside."
With hindsight, we can see JNJ bounced at the end of April and made a higher low in May before resuming its uptrend. Traders following my suggested game plan would be long from early June. Sell stops could be raised to a close below $125 from a close below $122.
Let's look further at the charts and indicators.
In this updated daily bar chart of JNJ, above, we can see prices are rising above the rising moving averages -- a positive setup. The On-Balance-Volume (OBV) line has been moving up with the price action and is close to making its own new high for the move up. In the lower panel of this chart is the 12-day momentum study, which shows equal highs in May and June so far. The movement in the momentum indicator is a bearish divergence to the price movement, which has made higher highs. This divergence is not major as it has only lasted a short time and it is not a sell signal by itself.
In this weekly chart of JNJ, above, we can see prices are above the rising 40-week moving average line. Unlike the daily OBV line, which has yet to make a new high, the weekly OBV line is in new high ground and tells us that aggressive buying and accumulation of shares of JNJ have continued from its start back in in late 2015.
In this Point and Figure chart of JNJ, above, we can see a stairstep-like advance from late 2015. The trade at $130 (the 6 on the chart) was a breakout from a double top and there is a potential price target of $169.
Bottom line: JNJ might see some near-term sideways consolidation to digest its gains from April, but I would expect the rally to continue. Traders could maintain/hold longs from the strength above $128.