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Can J&J Break Out to Highs Amid COVID Vaccine Headlines?

Johnson & Johnson stock continues to trade well, but will issues with its COVID vaccine weigh down the stock? Let's look at the charts.

Johnson & Johnson  (JNJ) - Get Report shares have been drifting higher, slowly but surely. But its COVID-19 vaccine lately has been rocking the boat.

While Pfizer  (PFE) - Get Report and Moderna  (MRNA) - Get Report have been leaders with the COVID vaccine, J&J has played a role with its vaccine, too.

A few months ago, the worry was over blood clots despite such a fractional impact on those who had taken the vaccine.

While the company is now working to reduce those risks, Johnson & Johnson’s vaccine faces a new regulatory hurdle.

Specifically, the FDA may force J&J to disclose the risk of “a serious but rare side effect” known as Guillain-Barré syndrome.

So far, Johnson & Johnson stock hasn’t seen too much of an impact from these reports. But they may stymie the stock’s breakout attempt. Let’s look at the charts.

Trading Johnson & Johnson Stock

Daily chart of Johnson & Johnson stock.

Daily chart of Johnson & Johnson stock.

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In January, Johnson & Johnson broke out over the $154.50 level, which had been resistance throughout 2020. On a pullback in March, this area acted as support, along with the 10-month moving average.

Since then, the stock has been putting in a series of higher lows, as the 10-month moving average continues to trend higher.

Earlier this month, J&J found even more momentum, bursting through the 50-day moving average and that tricky $168 level. Despite all the headlines lately, the stock continues to trade above these marks.

That said, it continues to struggle with the $170 zone. This area rejected Johnson & Johnson stock in January and May. However, as it continues to trend higher, bulls are hoping that it can eventually break out over this area.

The question now is: Will these headlines and reports of the FDA keep a lid on the stock or will bulls continue to ignore it?

If it does keep the stock from breaking out over $170, look for support from the 21-day and 50-day moving averages. Below puts uptrend support in play (blue line) followed by the 10-month moving average.

On the upside, a close above $170 puts the current high in play at $173.65. If the shares clear $174, bulls might begin looking at the 161.8% extension as a possible upside target. 

Note: Johnson & Johnson is scheduled to report earnings on July 21.