JNJ Bulls be warned..an Elliot wave approach

Ανάμεικτα σήματα….
August 24, 2017
Μακρινές ματιές…
August 24, 2017

One of our stocks in focus is JNJ US (Johnson & Johnson).

finviz dynamic chart for  JNJ .

Share price is testing important short-term support trend line. Breaking below 132.50$ will be an important bearish signal. Price has entered the Ichimoku cloud and is in a neutral trend. Breaking below the trend line will increase the chances of breaking below the Kumo (cloud) and providing a bearish signal according to Ichimoku terms.

According to my elliott wave view there are high chances 5 waves from 109$ area are complete. So a pull back towards 128-122$ is justified.

Zooming out we get an even worrisome picture as a bigger 5 wave pattern could already be complete as well….

With bearish divergence signs from the RSI and a 5 wave pattern most probably complete, we might be standing at a major top with a major reversal coming. So bulls should be very careful…this is not an opportunity to take profits for bulls but an opportunity in the short side. I will be opening short positions once we break my support levels with stops at the highs.

Conclusion. JNJ US could be at the very early stages of a big decline as an impulse wave pattern since the lows of 2015 might be complete. Bulls need to be very cautious.  Could the negative verdict from the Talc cancer case be the first among the 5,500 cases the company faces and loses? Bloomber post here. This would be a terrible blow for the company and the stock market price will soon reflect the worries, fears and the concern this result creates.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.