Oil slipping? No worries! The week started off in a decidedly risk-on mood as traders gave a boost to the major stock market indexes. Evidently, they were optimistic that U.S. states would soon re-open after shutdowns related to the novel coronavirus put a damper on the economy.
Still, investors might want to exercise caution. World Health Organization officials recently suggested that the U.S. is facing a “very difficult situation” concerning the coronavirus. Still, there may be opportunities here for investors in the healthcare sector, which plays a vital role during this challenging time for the nation.
Technical traders like to examine charts closely for ideas, and wellness remains a top priority as communities strive to deal with the coronavirus. Today’s big three stock charts feature some well-known names that may offer value and leadership within the healthcare sector.
Johnson & Johnson (JNJ)
From Tylenol to Band-Aids, Johnson & Johnson (NYSE:JNJ) supplies America with products that help us to heal and feel better. But how will the first of our big stock charts make investors feel this week?
- As you can see, JNJ stock has completely recovered from the stock market havoc caused by the coronavirus crisis. The sentiment is clearly risk-on as the trading community has given this stock its seal of approval.
- Note, though, that Monday’s candlestick has formed what’s known as a “shooting star.” That means the JNJ stock price pushed upwards but then the buyers gave out, leading to a nearly flat close by the end of the trading session.
- This is the third candle in a row that couldn’t effectively clear the $155 level. That’s the next target level to clear for the bulls, followed by $160.
Investors know Merck (NYSE:MRK) as a pharmaceutical mega-corporation that has earned a place on the Dow Jones Industrial Average index. Plus, it’s a dividend aristocrat that offers a sweet 3% forward annual yield. What’s the price action of MRK stock telling us now?
- Just look at the size of Monday’s big green candlestick! MRK stock is really showing signs of life here. The upper and lower wicks on the candle are fairly small, indicating that the bulls were in control for most of the trading session.
- The share price just broke above the wide, downward-trending channel. Now, the bulls will want to see the price stay above that channel for a while, thereby invalidating it.
- On Monday the bulls faced some resistance from the 200-day moving average. If they can clear that hurdle in the coming days, they’ll be in great shape.
Bristol-Myers Squibb (BMY)
A world-famous name in the biopharmaceutical niche, Bristol-Myers Squibb (NYSE:BMY) could see a serious move in its stock shares soon. That’s because the company’s May 7 earnings report date is approaching fast. For now, though, we can scan the BMY stock chart for clues as to the trading community’s sentiment on this one.
- BMY stock might be getting exhausted after such an impressive bullish run. Tuesday’s candlestick is rather small considering the major stock market indexes made outsized bullish moves on this particular day.
- Still, the bulls are in control until proven otherwise. Evidence for this thesis comes from the fact that BMY stock is above the 20-, 50-, and 200-day moving averages.
- Be advised that there is strong resistance at the $67.50 level. There’s nothing wrong with taking profits at that price point. Moreover, we can see that the daily trading volume in BMY stock is diminishing. The bullish thesis needs a substantial pickup in volume in order to support a continuation in the stock’s upward momentum.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.