Since the crash of March 2020, all stocks have tried to recover what they lost and JNJ was no exception. Johnson & Johnson did not only recover the lost, but it also reached historic highs. In those days, we were looking for an entry in 155.33 – 156.93 area to reach a target above $176.00 dollars.
JNJ March 2021 Daily Chart
In this old chart, JNJ had a strong recovery in 3 swings. The wave ((3)) had its highest point at 173.69 rejected by the market in a double correction structure and overlapped the wave ((1)) zone to end the wave ((4)). We were expecting one swing higher to complete wave ((5)) as an Ending Diagonal. (If you want to learn more about Elliott Wave Theory, please follow these links: Elliott Wave Education and Elliott Wave Theory).
JNJ July 2021 Daily Chart
The share price continued to rise until reach 172.79 which we called wave (1) doing a Leading Diagonal (LD) structure. Before that in April, wave 2 in red drop to our minimum entry at 156.93 and bounce to complete the LD. From there, we have a clear correction as a zig zag wave (2) missing our ideal second entry for a few cents and the possible target to complete wave ((5)) came in 178.97 – 187.48 area.
JNJ September 2021 Chart
The rally continues and we achieved our minimum target at 178.97 from 156.93 gave us a 14.04% return and we were expecting one more swing high to complete 5 waves up and the daily ending diagonal with wave ((5)). JNJ missed a new high and the ending diagonal with lesser degree structure as 5-3-5-3-5 have to be changed to 3-3-3-3-3 as you can see in the update. The rejection has been strong enough to give us the conviction that wave II is in progress and wave I finished at 179.92.
The drop began and we considered an ((A)), ((B)), ((C)) zigzag correction to complete wave II. Wave ((A)) took the form of an impulse. We needed one more wave that breaks 162.17 to reaffirm the idea of the impulse.
JNJ January 2022 Chart
JNJ kept dropping and completed the impulse as wave ((A)). Then we saw a bounce that we are calling as irregular flat as wave ((B)) and as we stay below wave ((B)) we need one more impulse down to at least 151.00 to end wave ((C)) and the whole correction as wave II. We are very near to the invalidation level and a break of 173.51 will change the fractal. Inclusive wave II could be down with the new low of wave (B) in blue. However, we are looking for more downside as it stays below 179.92 high the probabilities to reach 151.00 are intact.
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