Misinterpreted Opportunity?

Following markets for more than 3 decades now, one of the simplest tenets is, when bad news can not knock a stock down it should be viewed as a positive. Of course, it like anything else is not infallible, as experience is a hard teacher. If gives the test first and the lesson after. But the chart below of JNJ may turn out to be a good example. It has been in the headlines recently for possible blood clots, although it has for the most part shrugged off the news. The stock has basically treaded water for some time now with YTD and one-year returns in the single digits, and it does offer a decent dividend yield of 2.4%. That consolidation may see the stock awake from that long hibernation. A bearish island reversal was recorded with a gap higher on 1/26, then one lower on 1/29, but a bullish inverse head and shoulders is taking shape (those patterns often work better at bottoms). It has on a WEEKLY CLOSING basis been trading between the round 150-170 numbers the last 3 months, and a break above in the near term can be powerful.

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