In our last review of Johnson & Johson ( JNJ) back on April 22, we wrote, "We said to avoid the long side of JNJ in our Jan. 24 review ahead of earnings. Prices have climbed to new highs but momentum is slowing. JNJ is showing independent price strength but I remain cautious with this bearish divergence." A sell side fundamental analyst rated JNJ a new outperform with a $180 price target Wednesday, but does the technical approach support this view? Let's review the charts of JNJ again. 
In this updated daily bar chart of JNJ, below, we can see that prices made a high in late April and have turned lower. Prices are trading below the declining 50-day moving average line and have been testing the 200-day moving average line this month. Trading volume has been choppy for months, but notice the direction of the daily On-Balance-Volume (OBV) line. It has been in a decline for the past 12 months, telling us that sellers of JNJ have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In this weekly Japanese candlestick chart of JNJ, below, we can see the past three years of price action. If we ignore the early 2020 pandemic low the chart traces out a nice upward channel. The problem with this channel is that prices are testing the lower end or uptrend of the channel with the indicators weakening. The slope of the 40-week moving average line has turned flat. The weekly OBV line has made a high in May while the MACD oscillator made a bearish divergence and has crossed to the downside for a take profit sell signal.
In this daily Point and Figure chart of JNJ, below, we can see a downside price target in the $158 area.
In this weekly Point and Figure chart of JNJ, below, we can see a target price in the $155 area. This kind of weakness could open the way to further declines.
Bottom line strategy: JNJ has been in an uptrend since 2012 but a decline to the $155 area in the weeks ahead could break that long-term trend.
