When I reviewed Johnson & Johnson (JNJ) a month ago, I wrote that "JNJ is still in a gloomy downtrend and weighing on the GLOOM Index. The Point and Figure chart suggests that prices could decline further, but a bullish divergence from momentum promises a recovery. I think JNJ needs some sideways trading with a stronger OBV line." In the past four weeks, JNJ has improved modestly, but more sideways price action and base building are probably needed. Let's check out the latest charts and indicators.
In this updated daily JNJ bar chart we can see that earlier this month prices rallied above the now rising 50-day moving average line. The slower-to-react 200-day line has been declining since late March and is still bearish. The daily On-Balance-Volume (OBV) line has moved up since early June, but it isn't giving us the strongest presentation. The daily Moving Average Convergence Divergence (MACD) oscillator has crossed above the zero line this month but recently narrowed towards a take profits sell signal.
In this weekly bar chart of JNJ, below, we can see that prices are still below the declining 40-week moving average line. The weekly OBV is still in a weak trend and tells us that sellers of JNJ have been more aggressive. The weekly MACD oscillator has crossed to the upside from below the zero line for a cover shorts buy signal. A buy signal with a crossing of the zero line is still well in the future.
In this Point and Figure chart of JNJ, we can see a bullish price target of $158 being projected, but it needs a rally to $135.28 for a breakout.
Bottom line: The charts and indicators for JNJ have improved but more sideways/base building is probably needed. Be patient.
