Skip to main content

Sell Johnson & Johnson After Vaccine Pause? See This Chart First

Johnson & Johnson is under pressure on news that the rollout of its COVID-19 vaccine is being paused. Here's a look at the chart.

Johnson & Johnson  (JNJ) - Get Johnson & Johnson Report shares were down about 2.5% on Tuesday, coming under pressure after the Centers for Disease Control and the Food and Drug Administration “suspended use of the drugmaker's coronavirus vaccine” amid concerns of blood-clotting cases.

J&J’s vaccine was being used to help stop the spread of COVID-19, alongside vaccines from Pfizer  (PFE) - Get Pfizer Inc. Report and Moderna  (MRNA) - Get Moderna Inc. Report.

Pausing the J&J vaccine is obviously a negative for the company. But let’s remember, Johnson & Johnson has a lot more going for it than just that. So too does the country, for that matter.

While the vaccine has played a role in the vaccination efforts for the U.S., it has been dwarfed by the number of shots given from Pfizer or Moderna.

Further, many are not willing to bail on a high-quality company like J&J over a pause in its COVID-19 vaccine efforts. Let's look at the charts.

Trading Johnson & Johnson

Daily chart of Johnson & Johnson stock.

Daily chart of Johnson & Johnson stock.

Keep in mind, J&J will report earnings before the open on April 20. We have to take that into account when looking at the chart.

Scroll to Continue

TheStreet Recommends

Right at the end of December, Johnson & Johnson stock broke out over range resistance near $154.50. It later retested this level and held it as support - albeit after giving bulls a bit of a scare first.

So far, the 21-week and 100-day moving averages continue to hold as support. However, J&J stock is flirting with a break of these measures on Tuesday.

Should we see a bit more selling pressure into earnings (or after earnings for that matter), let’s keep an eye on this $154.50 level and the 200-day moving average just below that.

As long as this zone holds as support, dip-buyers have a reasonable risk-reward setup on the long side.

Below the 200-day moving average is where things get tricky. While it’s possible we see a false breakdown, a move below these measures opens Johnson & Johnson stock up to its previous trading range where $138 was support and $154 was resistance.

So use caution on a close below the 200-day moving average.

On the upside, bulls need to see a move back over the 10-week and 50-day moving averages. Above these measures puts the March high in play near $167, followed by the all-time high up at $173.65.