Support Reversal for JNJ

Tuesday, September 26th

Good evening folks! The indexes closed mixed today but moved very little overall. Tonight we are going to be looking at another T3 Power Suite signal, this time a reversal signal on Johnson & Johnson.

JNJ Reversal Signal

JNJ is approaching support at $130 which would be a great spot to look for a reversal.

T3-S3 V2 

JNJ has been performing extremely well for all of 2017, much like it did in 2016. Over the past few months though, it has been bouncing around a trading range with the upper boundary close to $135 and the lower boundary close to $130, which is where it is now. Both of those levels are serving as resistance and support respectfully and have not been broken. This will be the fourth time in this quarter alone JNJ has tested support. Usually, the more times a support (or resistance) level is tested, the larger the reversal move will be.

It is now trading below several moving averages but still well above the 200 SMA and it is sitting right at 50 on the RSI indicator, which tells us it is neutral in terms of being overbought or oversold. Relative momentum is below zero, but it has started to move higher and is creeping towards bullish territory. If this reversal takes place, we could see JNJ move back towards the upper range boundary at $135 rather quickly.

This signal is brought to you by the T3 Power Suite Version 2! The T3’s strategies are designed to generate signals that lead to constant gains with only small drawdowns. We designed T3 to stay invested as much as possible while avoiding the meltdowns that can occur at any time.

The T3 Strategies look for small pullbacks in the market, placing Long Trades on the likelihood of a reaction rally. It is modeled after the trading methodology known as the Reversion to Mean or R2M method. The R2M principle states that markets trend around 80% of the time. Inside of these trends, there are pullbacks that create temporary oversold conditions. The goal is to identify these pullbacks at the precise moment they appear oversold to the market and then buy them just ahead of the bounce. Then, one holds the position just long enough to capture the reaction move and take a profit.

To learn more about the T3 Power Suite, you can check out its PDF here or find it in our Advanced Strategies solutions page here!

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About the Author

Ryan has been with Nirvana since 2012 and has been manning the trading desk since Day 1. He was one of the founding members of Nirvana's Trading Lab and also TraderSource.com along with Ryan Olson and Russell Casperson. Ryan logged more than 3,500 hours trading and educating live in the Lab. He is also the lead author of SignalWatch.com. Ryan is a seasoned educator and has conducted numerous educational webinars and is an OmniTrader University instructor. Ryan prefers swing trading and position trading. Outside of the market, Ryan has passions for the outdoors, baseball, exercise, coffee, pop-culture and spending time with his family.

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