Stock of the day: Johnson & Johnson

Looking at Johnson & Johnson (J&J) on the hourly chart, there is potential for a bearish correction after an extended bullish trend. Several technical signals are pointing toward this possibility.

First, we have a head and shoulders pattern forming, which is often a reversal indicator signaling that a bullish trend could be nearing its end. This pattern is highlighted within the green rectangle. The most critical aspect of the head and shoulders formation is the neckline, which in this case is marked by an orange line. Price action around the neckline is essential in determining the next move.

Adding to the bearish sentiment is the red uptrend line, which has already been broken. This break is typically a negative signal, suggesting the buyers are losing momentum. Currently, the price is fighting at the neckline, and a breakout below the orange neckline would confirm the bearish move, offering a stronger signal to sell.

However, as always, there’s an alternative scenario to consider. If the price defends the neckline and climbs back above the red uptrend line, it would invalidate the bearish setup and provide a fresh signal to go long. But for now, the sentiment leans negative, and the likelihood of a downswing is much stronger than a continued upswing.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-johnson-johnson-4