Johnson & Johnson : Beginning of a bearish movement
By Alexandre Nutte
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
US$66.5 | US$64.2 | US$67.3 | +3.46% |
From a fundamental viewpoint, the company is trading at a high level. Its “enterprise value/revenue” ratio is estimated at 2.6x for 2012 and the PER is 13.1x for the same period. Analysts polled by Thomson-Reuters have regularly revised downward EPS estimates in the last months.
Once USD 67 was hit, potential on the bullish consensus was depleted. The USD 61.8 area had stopped the last decline, allowing a significant rebound. Therefore, it would be a good opportunity to take a short position on the Johnson&Johnson’s stock to anticipate a downward movement to USD 64.2. A stop-loss order will be fixed at USD 67.3.