As it stands, shares are sitting right on key support. Making this make-or-break mark even more notable is that investors are expecting a key ruling to be decided in J&J's role with the opioid crisis.
Of course, that ruling is expected around 4 p.m. ET, which is when the U.S. stock market will close for the day. The announcement could set up a volatile after-hours session for Johnson & Johnson stock.
That doesn't necessarily mean the announcement will be bad, but it could certainly force the stock into a big move in either direction. While some analysts are forecasting a potential fine between $500 million and $5 billion, many seem to be pricing in a figure at or below the former.
If the fine is far larger than expected, then this could cause buyers to walk and sellers to pounce on J&J. If the fine is roughly in-line or even smaller than expected, then shares will likely rally. While a fine isn't good for the bottom line, the stock may still rally now that the air is cleared and an unknown event is out of the way.
With that, let's look at the charts.
Trading Johnson & Johnson Stock
Johnson & Johnson stock is currently below the $128 mark, which has proven notable over the past few years. After breaking below the 200-week moving average in July, the stock tested this area repeatedly for a few weeks. Each time, it held strong.
However, J&J stock was unable to reclaim the 200-week moving average, which has been acting as recent short-term resistance. If the stock's reaction to the opioid news is positive, investors will need to see the share price reclaim this moving average.
In doing so, it also puts the 10-week moving average and 61.8% retracement at $131.69 on the table. Last week, both of these measures acted as resistance, as JNJ stock once again failed to end the week north of its 200-week moving average.
Should shares rally and clear these marks, investors will turn their sights to the $134 to $135 area, a range where the 50-week moving average, 50-day moving average and 200-day moving average currently trade near.
If the reaction to the opioid news is negative, I suspect J&J will lose $128 support. In that case, it puts the $122.50 and $117.50 areas on watch. The latter zone played a large role as support in early to mid-2018. However, keep in mind that even amid the Q4 turmoil, the lowest Johnson & Johnson stock fell was $118.50.
Going into the ruling, keep it simple: Either $128 is reclaimed and holds as support, setting up JNJ for more upside, or it fails and lower support levels are in play.
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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.