Here's How Johnson & Johnson Stock Looks Ahead of Earnings

All eyes will be on JNJ as it releases its numbers Tuesday.

Johnson & Johnson (JNJ) is due to report its quarterly earnings figures on Tuesday, Oct. 19, and investors will be ready to pick through the numbers and footnotes.

We last reviewed the charts of JNJ on June 15 and wrote that, "traders could probe the long side of JNJ again at current levels, risk to $159 and add to longs above $172. The $210 area is our price objective for now." 

Let's see how that advice turned out. 

In the updated daily bar chart of JNJ, below, we can see that the shares have been trading around our $159 stop so I will assume that traders took a loss on our June recommendation. This is a little frustrating as the charts suggest strength ahead for the healthcare giant.

The shares are trading below the 50-day and 200-day moving averages but the On-Balance-Volume (OBV) line looks like it has stabilized and the 12-day price momentum study shows a pattern of higher lows from September to October for a bullish divergence when compared to the price action. The momentum study is probably foreshadowing a move to the upside for JNJ. 

 

In the weekly Japanese candlestick chart of JNJ, below, we see a mixed picture. Prices are trading below the rising 40-week moving average line. The longer-term uptrend suggests that JNJ could or should rally back above the long-term moving average line. Recent lower shadows tell us that traders and investors have been rejecting the lows.

 

The weekly OBV line is strong with only a small dip. The 12-week price momentum study should be watched for a higher low this week.  

 

 

 

In this daily Point and Figure chart of JNJ, below, we can see that the software shows a potential downside price target and that a significant rebound is needed to turn prices higher.  

 

 

Bottom-line strategy: I have no special knowledge of what JNJ is going to report on Tuesday. The lower shadows on the weekly candlestick chart and the improving daily momentum picture suggests that some traders are expecting higher prices. 

 

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