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JimVanMeerten (57.33)

Johnson & Johnson is a buy



August 11, 2011 – Comments (0) | RELATED TICKERS: JNJ

Johnson and Johnson (JNJ) is an S&P 100 company that is a core pharmaceutical holding in most Wall Street brokerages' recommended holdings list that has been selling at a discount  in the recent weeks.  As the economy recovers you should see a nice recovery in price and conservative accounts might realize a 12% annual total return over the next 5 years.  The 3.4% dividend yield is above average and at 45% of earnings looks safe to continue or even increase.

These Barchart indicators show a declining price momentum that may allow you to pick up a bargain:

1 - 56% Barchart technical sell signal -- technical sell signals can be a good reason to add to core holdings

2 - Trend Spotter sell signalBelow its 20, 50 and 100 day moving average

3 - 13 new lows and down 6.22% off its recent high

4 - Relative Strength Index 27.93% and falling

5 - Trades around 63.94 which is below its 50 day moving average of 66.32

6 - Barchart support level is presently 63.82 which is very close to today's trading range

Summary:  If you believe the analysts' projections that Johnson and Johnson (JNJ) will  have increasing sales and earnings in the future then this current price weakness may be an opportunity to either add to you present holding or make a new position at a discounted price.  At the present price level JNJ is selling at a 15% discount to the rest of the market's P/E ratio.  Since this company has a A++ financial strength rating and a 100% rating for earnings persistence and earnings predictability, invest by the numbers.  My way to play this great opportunity is to milk the price weakness by putting in a moving buy stop at the 20 day moving average.

Jim Van Meerten is a Marketocracy Master

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