JNJ snaps to lowest close since April 13th
Johnson & Johnson (JNJ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, JNJ ended the week -4.03% lower at 144.37 after tanking $2.34 (-1.59%) today, notably underperforming the Dow Indu. (-0.04%) ahead of tomorrow's Memorial Day market holiday. This is the biggest single-day loss in over three weeks. Today's close at 144.37 marks the lowest recorded closing price since April 13th. Trading $1.72 higher after the open, Johnson & Johnson was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (JNJ as at May 22, 2020):
Friday's trading range has been $2.23 (1.54%), that's below the last trading month's daily average range of $2.68. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for JNJ.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 143.54 (S1).
Crossing below the lower Bollinger Band for the first time since March 23rd, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 148.81 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on March 20th, JNJ lost -7.30% on the following trading day.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Johnson & Johnson. Out of 129 times, JNJ closed higher 58.14% 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 62.79% with an average market move of 0.88%.