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.
Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com
Author, Stock Charts For Dummies
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