JNJ: Bearish Breakdown Analysis 4H (Apr. 26)X FORCE GLOBAL ANALYSIS:
Johnson & Johnson has shown great momentum in its small rally over the past few weeks. However, technicals demonstrate signs of prices having temporarily topped out.
Technical Analysis
- The first thing we spot is a textbook bearish divergence.
- Prices form higher highs, while the Relative Strength Index (RSI) forms lower highs
- The Moving Average Convergence Divergence (MACD) has formed a death cross, with increasing bearish histograms
- We have broken down from the ascending parallel channel, and the support has now become resisance
- Prices have been testing the upper resistance of the Bollinger bands, and a test of the lower support is highly likely
- We have two price gaps on the 4H chart, waiting to get potentially filled
- The volume is decreasing as bearish tensions increase
What We Believe
Although JNJ is a fundamentally sound stock, and still great for the long run, short term technicals demonstrate a potential downside.
Trade Safe.