During Monday's Mad Money program, Jim Cramer said he would recommend drug stocks like Johnson & Johnson (JNJ) in this volatile environment. Let's check the charts.
In this daily bar chart of JNJ, below, we can see that prices just pulled back to close below the rising 50-day moving average line. The slower-to-react 200-day moving average line intersects down around $137.
The daily On-Balance-Volume (OBV) line shows a bullish rise the past year right up until the end of last month. The OBV line has turned lower this month but not in a dramatic way.
The Moving Average Convergence Divergence (MACD) oscillator is in a take profits sell mode and approaching the zero line for a potential outright sell signal.
In this weekly bar chart of JNJ, below, we can see that prices broke out over their previous highs in 2018. JNJ is trading above the rising 40-week moving average line and the weekly OBV line shows a rise from December 2018, and only a minor dip this February.
The MACD oscillator on this longer time frame has been narrowing in recent weeks and could cross to the downside for a take profits sell signal.
In this daily Point and Figure chart of JNJ, below, we do not see any distribution (selling) and the chart is projecting an upside price target of $190. A decline to $139.38 is needed to weaken this picture.
Bottom line strategy: JNJ is a long-time household name. The company has grown organically and by acquisitions. It has dealt with adversity and bad news. Put JNJ on your shopping list to buy on strength above $152.
