Stock’s Technical Analysis – Johnson & Johnson (NYSE: JNJ)

US stocks brushed aside their first wobble of the year and got back to setting records on Thursday.

Energy stocks led the way after the price of oil touched its highest level since 2014.

The gains for indexes marked a return to calm, after a whiff of nervousness wafted through markets a day earlier as interest rates rose.

After rates held steady on Thursday, the Standard & Poor’s 500 index marked its seventh gain in the last eight days.

The S&P 500 rose 19.33 points, or 0.7%, to a record 2,767.56. The Dow Jones industrial average rose 205.60 points, or 0.8%, to 25,574.73, the Nasdaq composite gained 58.21 points, or 0.8%, to 7,211.78 and the Russell 2000 index of small-cap stocks surged 26.99 points, or 1.7%, to 1,586.79.

Optimism about a strengthening global economy and growing corporate profits have assisted propel markets even though stocks have become more expensive relative to earnings.

The market’s smooth ride upward hit a bump on Wednesday when concerns rose that a jump in interest rates could derail the ascent. Rates have been ultra-low since the Great Recession, a culmination of a decline in bond yields over the last three-plus decades. (Source: Independent.ie)

Top Pick for Friday: Johnson & Johnson (NYSE: JNJ)

Johnson & Johnson (NYSE: JNJ) has grabbed attention from the analysts when it experienced a change of 0.57% in the last trading session to close at $144.79. A total of 4,910,310 shares exchanged hands during the intra-day trade contrast with its average trading volume of 5.54M shares, while its relative volume stands at 0.89. Relative volume is the comparison of current volume to average volume for the same time of day, and it’s displayed as a ratio. If RVOL is less than 1 it is not In Play on this trading day and Investors may decide not to trade it.  If RVOL is above 2 it is In Play and this is more evidence Investors ought to be in the name.  When stocks are *very* In Play one can see a RVOL of 5 and above.  The higher the RVOL the more In Play the stock is.

Day traders strive to make money by exploiting minute price movements in individual assets (usually stocks, though currencies, futures, and options are traded as well), usually leveraging large amounts of capital to do so, therefore they trade on Stocks in Play. In Play Stocks are volatile enough to produce good risk and reward trading opportunities for both bull and bear traders intraday. Most company stocks have very little volatility. They generally move extremely slowly and they only produce big price swings when the company produces good or bad trading results, which may only happen a couple of times a year at best.

In deciding what to focus on – in a stock, say – a typical day trader looks for three things: liquidity, volatility and trading volume. Liquidity allows an investor to enter and exit a stock at a good price (i.e. tight spreads, or the difference between the bid and ask price of a stock, and low slippage, or the difference between the predictable price of a trade and the actual price). If a stock does not have good liquidity then it may take some time before a broker is able to negotiate a deal to buy or sell a stock and the broker may not be able to get the sell or buy price that the trader is looking for. This is a problem for day traders and it could mean the difference between a profitable and non-profitable trade.

Traders have different rules for what constitutes liquidity and a good guide is the volume of trades and volume of shares that are traded each day. 100,000 shares traded per day would be a minimum for most traders and some require 1,000,000.

Trading volume is a gauge of how many times a stock is bought and sold in a given time period (most commonly, within a day of trading, known as the average daily trading volume – ADTV). A high degree of volume indicates a lot of interest in a stock. Often, a boost in the volume of a stock is a harbinger of a price jump, either up or down.

Volatility is simply a measure of the predictable daily price range—the range in which a day trader operates. More volatility means greater profit or loss. After a recent check, Johnson & Johnson (NYSE: JNJ) stock is found to be 1.14% volatile for the week, while 1.00% volatility is recorded for the month.

Technical’s Snapshot:

The stock has a market cap of $385.80B and the number of outstanding shares has been calculated 2.66B. Based on a recent bid, its distance from 20 days simple moving average is 2.38%, and its distance from 50 days simple moving average is 3.21% while it has a distance of 8.64% from the 200 days simple moving average. The company’s distance from 52-week high price is -0.61% and the current price is 30.72% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 69.19 together with Average True Range (ATR 14) of 1.56.

Stock’s Valuation:

Past 5 years growth of JNJ observed at 11.20%, and for the next five years the analysts that follow this company is expecting its growth at 7.07%. The stock’s price to sales ratio for trailing twelve months is 5.19 and price to book ratio for the most recent quarter is 5.25, whereas price to cash per share for the most recent quarter are 23.77. Its quick ratio for the most recent quarter is 1.00. Analysts mean recommendation for the stock is 2.50. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.

Disclaimer: Any news, report, research, and analysis published on Alphabetastock.com are only for information purposes. Alpha Beta Stock (ABS) makes sure to keep the information up to date and correct, but we didn’t suggest or recommend buying or selling of any financial instrument unless that information is subsequently confirmed on your own. Information in this release is fact checked and produced by competent editors of Alpha Beta Stock; however, human error can exist.

Eddie A. New

Eddie A. New focuses on breaking news stories and ensuring we offer timely reporting on some of the most recent stories released through market wires about Healthcare Sector companies. He has formerly spent over 5 years as a trader in U.S. Stock Market and is now semi-stepped down. He works on a full time basis for alphabetastock.com specializing in quicker moving active shares with a short term view on investment opportunities and trends. Email: eddie.new@alphabetastock.com

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