Johnson & Johnson Might Need a Band-Aid Ahead of Earnings

Johnson & Johnson (JNJ) is expected to report its latest quarterly earnings on Tuesday before the stock market opens. The shares have been weak so far this month so let’s review the condition of the charts to see if any bandages are needed.  

In the daily bar chart of JNJ, below, I can see that a rally in the shares stalled around $180 in December and early January. Prices have declined and closed below the 50-day and 200-day moving average lines. Both moving averages have begun to weaken.

The On-Balance-Volume (OBV) line has turned lower from the middle of December, suggesting that sellers of JNJ are being more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator just crossed below the zero line for an outright sell signal. 

In the weekly Japanese candlestick chart of JNJ, below, I am seeing a potential top pattern playing out over the past two years. Prices made a high in 2022 and a lower high in early 2023. The shares have traded above and below the 40-week moving average line.

The OBV line has been weak since May. The MACD oscillator is about to cross to the downside for a take profit sell signal. 

In this daily Point and Figure chart of JNJ, below, I can see a potential upside price target in the $203 area. A trade at $164 could weaken this picture. 

 

In this weekly Point and Figure chart of JNJ, below, I see the same $203 price target. Again, a trade at $164 could weaken things. 

Bottom-line strategy: I have no special knowledge of what JNJ could tell shareholders on Tuesday but the charts are mixed to weak so traders should be cautious.