Stocks: JNJ shares ready for new purchases

JNJ

Time frame: W1

Technical Analysis: In the last few weeks, JNJ's shares have been under pressure from sellers, eagerly awaiting the outcome of the lawsuit against the company. Shortly after midnight on Monday, it was revealed that the company was sentenced to pay $ 572 million, well below expectations of $ 1-2 billion.

Technically speaking, the price of the shares managed to make a correction to several strong diagonal supports and 38.2% according to Fibonacci. Given the not-so-negative outcome of the case and these strong supports, the stock price is more likely from here to start rising again to test the previous highs of $ 148 a share. The deal stop should be drawn below the bottom registered on 12/23/18 at a price of $ 121.

Indicators:

At this stage, 200 periodic EMA plays the role of strong support and 50 periodic resistance.

DeM is coming out of over-sold values, which supports the purchase scenario.

Alternative Scenario: If the price manages to break through the multiple supports and the 200 period moving average, then we can see the price drop to the next strong support level at 50% Fibonacci.

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