JNJ loses $2.29 (-1.7%) after posting strong earnings
Johnson & Johnson (JNJ) Technical Analysis Report for Jul 16, 2019 | by Techniquant Editorial Team
JNJ finished Tuesday at 132.42 losing $2.29 (-1.7%), strongly underperforming the Dow Indu. (-0.09%) following today's earnings report. Today's close at 132.42 marks the lowest recorded closing price since June 3rd.
Daily Candlestick Chart (JNJ as at Jul 16, 2019):
JNJ reported earnings of $2.58 per share before today's market open. With analysts having expected an EPS of $2.43, Johnson & Johnson topped market expectations by 6.2%. The company's last earnings report was released on April 16, 2019, when Johnson & Johnson reported earnings of $2.1 per share beating market expectations by 3.4%.
Tuesday's trading range has been $1.45 (1.09%), that's slightly below the last trading month's daily average range of $1.97. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for JNJ.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern. The last time a Bullish Hikkake Pattern showed up on July 2nd, JNJ gained 1.51% on the following trading day.
After trading down to 131.77 earlier during the day, the market bounced off the key technical support level at 132.32 (S1). The failure to close below the support might increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 134.42 (R1).
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 140.07.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to May's low at 128.52 we could see further downside momentum if potential sell stops at the level get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Johnson & Johnson. Out of 27 times, JNJ closed higher 59.26% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 66.67% with an average market move of 0.86%.