Don't Ignore This Chart

This Big Pharma Stock is Closing in on a New High

 | 

Johnson & Johnson (JNJ) started the year on the wrong foot with a double digit decline the first six months. After hitting a 52-week low in late May, the stock turned around and advanced some 20% the next four months. Even though the stock remains below the January high, the big trend is up and this is the path of least resistance.

The chart below shows JNJ above the rising 50-day EMA and rising 200-day EMA. In addition, the 50-day EMA is well above the 200-day EMA and the stock is less than 2% from a 52-week high.

JNJ caught my eye because it recently bounced from oversold levels and broke out of a consolidation. The blue lines show a contracting range in October and the stock broke out of this "triangle" with a surge above 140 last week. This breakout ends of the consolidation, signals a resumption of the bigger uptrend and targets a move to new highs.


On Trend on Youtube

Available to everyone, On Trend with Arthur Hill airs Tuesdays at 10:30AM ET on StockCharts TV and repeats throughout the week at the same time. Each show is then archived on our Youtube channel.

Topics for Tuesday, October 31st:

  • Minding Gaps and Bounces ($SPX, $MID, $SML)
  • Sector Overview (Comparing the Bounces)
  • Is this Chart "On Trend?" (SOXX, IBB, IHF, IHI)
  • Bonds, Gold, Dollar, and Oil
  • Click here to Watch


Plan Your Trade and Trade Your Plan.

- Arthur Hill, CMT

Senior Technical Analyst, StockCharts.com

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill


Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
Subscribe to Don't Ignore This Chart to be notified whenever a new post is added to this blog!
comments powered by Disqus