Stock of the day: Johnson & Johnson

Tuesday was a good day for Johnson & Johnson even despite the fact, that the price fell 0.7% yesterday. How come? Well, what matters is what happened during the session and where.

JNJ in climbing higher since the beginning of October. In the middle of November, the price managed to break two, crucial, long-term resistances. The first one was the down trendline connecting lower tops since April (red) and the second one was the horizontal resistance on 175 USD (orange), which was blocking buyers in July, August, October, and November.

After the breakout, the price was enjoying a ride up but on Tuesday, we experienced a sharp reversal, which aimed at broken resistances, to test them as supports. That test was positive for the buyers as the price rejected lower levels and bounced back up, creating a long tail on a daily candlestick. This is why, yesterday was a positive day, despite the price closing negative.

Positive sentiment on JNJ will remain as long as the price will stay above the 175 USD support. Price closing a day below can be a sell signal but this scenario is currently less likely to happen.