Johnson & Johnson (JNJ) is an iconic and diverse health care giant and a component of the Dow Jones Industrial Average. The stock closed Monday at $133.95, down 4.1% year-to-date and down 9.7% from its all-time intraday high of $148.32 set on January 17, and up 12.9% from its 2018 low of $118.62 set on May 29.
The daily chart for Johnson & Johnson
The daily chart shows four horizontal lines. From top to bottom the first is my quarterly risky level of $141.34, which is a level at which to reduce holdings on strength. The second line is my annual pivot at $133.60, which was a buy level going into earnings. The third line is my semiannual level at $130.04 where traders should add to positions on weakness.
The weekly chart for Johnson & Johnson
The weekly chart for J&J ended last week neutral but will be downgraded to negative given a close on Friday below its five-week modified moving average of $136.71. The stock is well above its 200-week simple moving average at $117.89, which is also the “reversion to the mean,” last tested at $86.36 during the flash crash of August 24, 2015. The 12x3x3 weekly slow stochastic reading is projected to decline to 73.81, down from 81.31 on October 12, falling below the overbought threshold of 80.00.
Given these charts and analysis, my trading strategy is to buy weakness to my annual and semiannual pivots of $133.60 and $130.04, respectively, and reduce holdings on strength to my quarterly risky level at $141.34.
