Technical analysis

Two more stocks to watch: week 3, 2024

By Antreas Themistokleous

19 January 2024

3017 two more stocks to watch

Week 3 is winding down, but these two stocks are just starting to look interesting. Let’s dig into Johnson & Johnson and Tesla performance to forecast how the rest of January might play out.

Johnson & Johnson (JNJ)

Shares in Johnson & Johnson have been trading in a bullish trend for the majority of the last quarter of the year and managed to end the quarter with a positive sign of around  +4%. The company is expected to report its earnings for the fiscal quarter ending December 2023 on Tuesday, 23 January, before market open. The consensus EPS is $2.27 (USD) compared to the result for the same quarter last year of $2.35. 

Johnson & Johnson has been paying dividends since 1972 and is one of the very few companies to do that for such a long period of time. This proves that investors buying this share are committed for the long term and with a current dividend yield of more than 2.97% also proves the commitment of the company towards its shareholders.

On the technical side, the price found sufficient resistance on the upper Bollinger band and corrected to the downside since. Currently, the price is testing the 50% support area of the weekly Fibonacci retracement level, which is also the psychological support of the round number ($160). 

Despite the bullish momentum of the last two months, the 50-day moving average has yet to cross above the slower 100-day moving average, but is definitely on the move to do so in the near short term given that the price continues its upward trajectory. 

Ift the price continues to the upside then the first area of possible resistance might be seen around the $164 price area which consists of the 61.8% of the weekly Fibonacci retracement and the upper Bollinger band, whereas if the opposite happens and the price moves down then the first area of technical support might be the $156 level, which is made up of the 38.2% of the weekly Fibonacci retracement and the 100-day moving average area.

Tesla Inc (TSLA)

Tesla Inc. share price faced some major headwinds throughout the quarter and ended the year with a minor decline of around 2%. The company is expected to report its earnings for the fiscal quarter ending December 2023 on Wednesday 24th of January, after market close. The consensus EPS for the quarter is $0.60 compared to the result for the same quarter last year of $1.07.

As of 30 September 2023, the net income of the company was down by around 44% year over year while the long-term debt was increased by almost 16%. On the positive side the current ratio of the company was just shy of 170% showing that the company has the ability to repay its short-term liabilities with the current assets at hand. Tesla also faces intense competition from other electric vehicle producers especially in China and Germany with the German competitor, Volkswagen, outselling the U.S. automaker last year by 1.4%.

From a technical analysis perspective, the price has been trading outside the Bollinger bands in recent sessions, indicating that market volatility for the company share is already fueled up. 

Even though the faster moving average (50 days) is trading just below the slower moving average (100 days), the Stochastic Oscillator has been at an extreme oversold level for the last eight sessions, possibly hinting that a correction to the upside might be visible in the near short term. If this scenario plays out then the first area of possible resistance might be seen around the $220 - $222 level, which consists of the psychological resistance of the round number and the 61.8% of the daily Fibonacci retracement level.


This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Author:

Antreas Themistokleous
Antreas Themistokleous

Antreas Themistokleous is a trading specialist in Exness. He is a Certified Financial Technician since 2018. As a member of the Society of Technical Analysts, Antreas is implementing advanced use of indicators and patterns to conclude in an action plan for different trading strategies.