Johnson & Johnson (JNJ) was reviewed last month when I wrote that "The charts and indicators for JNJ have improved but more sideways/base building is probably needed. Be patient." Looking at the updated charts and indicators of JNJ this morning it looks like prices are now ready to rally. Let's check the charts for a level to get involved.
In this daily bar chart of JNJ, below, we can see that JNJ has been testing the declining 200-day moving average line. Prices are above the rising 50-day line. The daily On-Balance-Volume (OBV) line has been going up since early June and it is close to making a new high above the April peak. A rising OBV line is a sign that buyers of a stock are being more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal but we could see a reversal to the upside again.
In this weekly bar chart of JNJ, below, we can see that prices have rallied to test the underside of the declining 40-week moving average line. The weekly OBV line has firmed slightly the past two months and the MACD oscillator has crossed to a cover shorts buy signal.
In this Point and Figure chart of JNJ, below, we can see an upside price target of $152.46 - a new high. A trade above $133.94 will be a breakout.
Bottom line strategy: JNJ finally looks ready and able to rally. Traders can go long and investors can add to longs above $134. Risk below $126 for now looking for the $150-$155 area.