Bulls Bought The Dip In Johnson & Johnson Stock: What's Next?
Johnson & Johnson’s (NYSE:JNJ) stock gapped down 3% Tuesday following the Food and Drug Administration and the Centers for Disease Control and Prevention’s recommendation that the use of its COVID-19 vaccine be paused in the U.S.
Reports show that of the 6.8 million individuals who have received the vaccine so far, six have suffered a rare type of blood clotting.
After the stock opened at $156.53 Tuesday morning, traders and investors who are still bullish on Johnson & Johnson’s stock bought the dip and erased over half the day’s loss by market close.
The Johnson & Johnson Chart: Johnson & Johnson closed at $159.46 Tuesday, higher than the resistance level of $159.09, which has now become support.
The stock printed a green bullish engulfing candle on the daily chart, indicating higher prices may come Wednesday.
Johnson & Johnson’s stock lost the eight-day and 21-day exponential moving averages Friday, and Tuesday’s action has share prices trading well below the two EMAs, which indicates the stock and the EMAs will need to catch up to each other eventually. This could be a bullish signal if the stock rises up to meet two EMAs.
There’s still a way to go for bullish Johnson & Johnson’s traders to feel confident, as the stock could be setting up a bearish head-and-shoulders pattern, with the next few trading sessions creating the right shoulder.
Bulls want to see Johnson & Johnson’s stock regain the eight-day and 21-day EMAs and negate the head-and-shoulders pattern by jumping over the next resistance at $164.08.
The stock could then make a move back to the its next resistance at $167.94.
Bears want to see Johnson & Johnson’s stock create the right shoulder in the bearish pattern in order to lose support at $159.09, which could push the stock down all the way to $153.60.
JNJ Price Action: Shares of Johnson & Johnson were trading down 0.41% at $158.80 at last check Wednesday.
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