NEW YORK ( TheStreet) -- Johnson & Johnson (JNJ) is working on its sixth straight gain after beginning the session with an upside gap. News this morning of the company's plan to offer $1 billion of revenue generating new pharma products is certainly attracting attention. Investors may be looking ahead to analyst upgrades as this announcement is digested.
In the near term, JNJ is becoming a bit extended and may need to consolidate soon. The recent run off the early May low has not pushed shares into overbought range, but the two-week rise has been rather sharp. Fortunately, this move has left behind a very solid layer of support, one that will keep a healthy pullback well-contained.
This key support zone includes the stock's multi-week March highs near $103.40 at the top band. Slightly below is a flatlining 200-day moving average. The bottom level is marked by last week's high as well as the April peak just above $102. If this area is tested during a pullback, JNJ bulls should take advantage.
Eventually a rally back up to the 2014-2015 highs has a strong probability.
Here's what the Street's Jim Cramer has to say about J&J's CEO.
"Alex Gorsky is so good. He had a lot of work to do when he came in to clean the up the mistakes of the past. But now he is playing offense with an amazing pipeline. Don't mess with this guy, he has game."
Cramer also commented recently in Real Money that J&J's stock is red hot and the company might want to do an acquisition. Want more information like this from Jim Cramer BEFORE your stock moves? Learn more about Real Money now!