When’s the last time you looked at Johnson & Johnson (JNJ)? It’s probably been a while, judging by the kind of names that generally gets attention from our clients.
But it may pique the interest of some chart watchers because the pharma giant is showing two noteworthy patterns: a “bullish flag” and a “golden cross.”
First, the bullish flag. This results from a stock pulling back after a rally. The resulting price action on the chart can resemble a flag on a pole, which explains the name.
JNJ has formed three bullish flags since jumping on a strong quarterly report in mid-July. The last two were followed by continued rallies to new highs, and the third one is still taking shape now.
Second, a golden gross is when a stock’s 50-day moving average rises through its 200-day moving average. It’s often viewed as a signal that longer-term direction is changing. The pattern appeared on JNJ about three weeks ago.
On top of these chart patterns, remember that strong earnings reports have made health care one of the market’s top sectors in the last 3-6 months.
In conclusion this isn’t a trade recommendation and everyone needs to do their own homework. But JNJ has been forming some potentially bullish patterns that may have escaped a lot of people’s notice.