The Longer Term View on Johnson & Johnson
- Posted by Greg Harmon
- on August 25th, 2014
Johnson & Johnson, $JNJ, had been consolidating in a box for over 2 years when it hit my radar in late 2011 here. It took a little longer to move out of that box but since then has had a spectacular run higher from the mid sixties to over 100. But the run does not seem to be over. In fact there are signs that it may be going through another short term consolidation phase before the next leg higher.
The chart above shows that the move to 105 in June pulled back and retested the 100 level in July. The price held and is moving back higher. Will it get caught at the falling trend resistance? Maybe. It went ex-dividend Friday though without much of a pullback. The momentum indicators are supportive of upside with a RSI rising and bullish and the MACD leveling after a pullback, and in positive territory. But a longer term trader or investor can deal with that by selling covered call options as it reverses to collect some premium. There is a natural stop just under 100, making the risk $3 less any premium sold. And how far can it go? The Measured Move out of the triangle it is making now would target 110 but the Point and Figure chart is carrying a price objective to at least 125. Who knew selling Band Aids, Listerine and Baby Powder could be so lucrative.
Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through August 2014 Expiry and sign up here
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Top Trade Ideas for the Week of November 24, 2014: The Rest
- Top Trade Ideas for the Week of November 24, 2014: The Rest Premium
- Top Trade Ideas for the Week of November 24, 2014: The Best
- SPY Trends and Influencers November 22, 2014
- Macro Week in Review/Preview November 21, 2014
- Wheat for Breakfast
- Watching the Cup and Handle in Hewlett-Packard
- Premium Earnings 11-20-14
- Spotting Sharks in Corn & Oil
- Positioning to Buy Disney on a Dip