JNJ Setting for a Break Out?

Published on Wednesday, 03 March 2010 07:04 Written by TradersHuddle Staff

New York, March 3rd (TradersHuddle.com) - Shares of Johnson and Johnson (NYSE:JNJ) closed the trading session at $63.44 near its 50 day and 200 day moving averages currently set at $63.87 and $60.72 respectively. JNJ's price action is above the 200 day moving average but below its 50 day moving average, signaling a possible break out.

Johnson & Johnson (NYSE:JNJ) manufactures health care products and provides related services for the consumer, pharmaceutical, and medical devices and diagnostics markets. The Company sells products such as skin and hair care products, Tylenol, pharmaceuticals, diagnostic equipment, and surgical equipment in countries located around the world. The consumer healthcare products company was founded in 1886 and is based in New Brunswick, NJ.

A tiered approach to enter the stock, appears to be the best way to maximize possible movements from the stock, as traders could enter JNJ with a small position and wait for the stock to break out above the 50 day moving average at $63.87, where traders could add to their position as momentum builds with the breakout. The flip side will be if support being referenced at the 200 day moving average set at $60.72 breaks it could mean further downside in the horizon for JNJ.