Johnson & Johnson (JNJ) has been consolidating sideways for a few years already. Over the last month or so, the stock has looked ready to push to the upside, but has just started to move. Here is what I see in the chart.
- The SCTR ranking is moving above 75, so that is bullish.
- The relative strength is breaking the downtrend and is pushing to new 6-month highs.
- Price broke out a few weeks ago, but it is building on that this week.
- PPO momentum wave is nice and high. Maybe a little too high, but it can also stay at an elevated rate for a while on a fresh breakout.
It's a nice setup for a defensive name that is also a Dow 30 name. The stop would go just below $145.
Good trading,
Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com
Author, Stock Charts For Dummies
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About the author:
Greg Schnell, CMT, MFTA is Chief Technical Analyst at Osprey Strategic specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA).
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