After a sharp sell-off around mid-December, the Johnson & Johnson stock (NYSE: JNJ) managed to climb back and regain not a full 70% of its losses. The stock got held near the 140.27 barrier and started moving sideways, between roughly the 136.45 hurdle and the above-mentioned 140.27 zone. But on April 4th, the share price dropped, broke the lower side of that range and tested the medium-term upside support line taken from the low of December 26th. This week we saw the stock falling a bit more, which led to a break of that upside line. Such a move raises concerns over the stock’s short-term upside potential, hence why we will take a more bearish stance for now.
Another push below the 135.19 support area might open the door to some lower levels, one of which could be the 133.12 obstacle, marked by the low of February 13th. We may see JNJ getting held there temporarily, or even rebounding back up slightly. But if even then, investors won’t find any value in the stock, the share price might continue sliding, bypassing the 133.12 hurdle. The stock could make its way to the 131.25 area for a quick test, which held JNJ from moving lower on February 11th.
Our oscillators are somewhat in support of the above-discussed scenario. The RSI is currently below 50, and even below 40, and also points slightly to the downside. The MACD is below zero and is slowly shifting below its trigger line.
On the upside, if JNJ makes a push back above the aforementioned upside line and travels inside the previously-mentioned range, this may turn the outlook back neutral again. We might see the price moving a bit higher within range, initially aiming for the 138.78 resistance. If that area is just taken as a temporary obstacle on JNJ’s journey north, this is when we will start looking into a potential re-test of the upper side of the range, at 140.27. That said, in order for the near-term outlook to switch from neutral to a more positive one, a break above that level is needed.
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