At the end of January, I analyzed Johnson & Johnson (JNJ) with a bullish outlook, and since then, the stock has performed well, gaining over $20. However, the situation has now changed.
Yesterday's bearish candle, marked by a red rectangle on the chart, stands out as a warning sign. Its formation at a key resistance level just below $170—a significant level from September—raises concerns. The stock broke above this level but then retraced sharply, forming a candle with a long upper wick and a strong bearish body.
This price action indicates rejection at resistance, suggesting that sellers are stepping in with greater strength. As long as the stock remains below this yellow resistance zone, the odds favor the bears, increasing the likelihood of a pullback or further downside movement.
For now, caution is warranted. A confirmed break above resistance could renew bullish momentum, but failure to do so may lead to a deeper retracement.