Johnson & Johnson stock has fallen in 10 straight sessions and was jolted by NYSE issues and the earnings report. Here’s the trade.
The health-care stalwart delivered a top-line miss and bottom-line beat for its fiscal fourth quarter, while the outlook was mixed.
Management’s full-year 2023 outlook had earnings pegged above analysts’ expectations, while the midpoint of its revenue outlook was a bit short of expectations.
J&J stock was trading lower on that report coming into the open. And if that wasn’t enough, there was an issue at the New York Stock Exchange.
Technical issues caused a number of stocks — including Johnson & Johnson — to halt shortly after the open. Most charts still display the stock’s erratic price action.
Johnson & Johnson stock was already weak coming into Tuesday, down in 10 straight sessions.
Despite the events of the day, the shares were off less than 1% at last check.
Trading Johnson & Johnson Stock
Daily chart of Johnson & Johnson stock.
Chart courtesy of TrendSpider.com
The aforementioned “erratic price action” can be seen on the daily chart above, as J&J stock is down only slightly from yesterday’s low but has a rather wide daily trading range.
In any regard, my observation with this chart is simple: The shares have been weak and are below all the major daily moving averages. It’s bearish.
Investors could make an argument based on valuation, the state of the business, dividend yield and a whole host of other factors. For traders, the approach is more straightforward.
As Johnson & Johnson stock may be on its way to its 11th straight decline, it’s doing so by trading lower on the earnings report and breaking below the 61.8% retracement.
That said, this steep of a downtrend could result in a reversal at a moment’s notice. That would occur when shares find a low, bounce, and reclaim the prior day’s or prior week’s low.
In this case, I would be watching last week’s low near $167.50. A bounce back up through that level could fuel a rebound back to the declining 10-day moving average, (currently near $171 but moving lower each day).
Short of that type of development in the short term, the trend is most certainly pointing down right now.
Below $167.50 leaves J&J stock vulnerable down to the $164 area, where it finds the 78.6% retracement.
If the selling pressure really picks up this quarter, the October low near $159 could be in play, while long-term support sits down at $155.