JNJ psar bear signal

Johnson & Johnson (JNJ) is showing a psar bear signal on the third day of a decline.

I'll say up front I don't like it as a directional play. The trend in JNJ has been sideways in a $62 to $65 range since last December, and the adx reflects that, with a score of 17.

I could see JNJ as an iron condor. The April position provides a decent premium.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
JNJ $64.57

The one gotcha is earnings, which are schedule for before the market open on April 20.


Is an earnings surprise likely? JNJ is a boring sort of company. It's earnings per share, including extraordinary items, have been fairly steady. Revenues declined in the last quarter, as did eps excluding the extraordinary.

So, I think the news risk is less with JNJ than is sometimes the case with, more volatile companies.

In a $62-$65 iron condor, there's a three-quarter percent cushion to the upside and a 4% cushion to the upside. Since the stock is showing a bear signal, I would want that greater downside cushion.

You are here:

• Reversal
• $65.47, +1.4%
• $65.31, +1.2%
• Now $64.57
• $64.53, -0.1%
• $64.15, -0.7%
• $62.79, -2.8%
• $61.89, -4.2%

This signal will be followed in the daily Watchlist, which is posted beginning around 2:45 p.m. Eastern. Look for it at www.timbovee.com.

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic   

About the glance:  The colors indicate the state of each signal.

• trend: green for up, red for down, yellow for sideways
• adx: green for above 30-up, red for 20-down, yellow for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.