This Drug Stock Was The Cure Today

• January 21, 2003
• Chris Tyler

With proper execution and money management
techniques, there were “no more tears” if you shorted Johnson &
Johnson this morning. We try our best to keep you informed whenever possible
of trading opportunities during the day. Sometimes the best thing we can do is
first alert you to a potential high-probability play by anticipating the move
ahead of time, and thereby giving you the opportunity and time to dig a little
deeper and prepare properly for any trades that may arise.

10:06:51

Intraday
Alert

From the Nightly Daytraders
Report, Johnson & Johnson (JNJ)
has pulled back to the unchanged level after an initial counter-trend gap higher
from an earnings report. The stock failed to clear resistance in the form of
the 13- and 50-Day moving averages and is now trading through the bottom of a
Slim Jim from Friday’s trade. JNJ was listed under the new category of Low RS
Reversal Patterns. The current action, which has the stock down .14 at 54.64, now
looks to be following through in the direction of the major trend. Due to the
“trap door” type of action on the intraday chart, we don’t have a
confirmed setup pattern as of yet, but it’s one to keep on the radar for short
entries from developed consolidations or counter-trend rallies that may ensue.

Johnson & Johnson was looking very interesting at this point. Earnings
were out on the stock, and from a daytrader’s perspective, it was showing
intraday volatility and range. This in and of itself might be a good reason to put
up the alert, as part of our job is to arm you with information that might
otherwise go unnoticed. You’ll also see that relevant technical information was
included in the form of our link to the Daytraders Report, from which JNJ was a
selected Low RS issue from Friday evening.

In this particular instance, the alert gave you the “heads up,”
with time to do some of your own independent research, but that didn’t mean we
were finished with our analysis either.

10:43:49

Intraday
Update

Johnson & Johnson (JNJ)
appears to be stalling out of a counter-trend rally that has seen a substantial
decrease in volume during the move up. The stock now appears to rolling out
of this counter move from its recent lows, confirmed by a break of an intraday
trendline. JNJ is up .20 at 54.99.

The stock proceeded to drop by over .56 from the
time of our second post. From a money management risk-to-reward perspective,
this move allowed one to scale out of the trade at sufficient price levels in
relation to the initial risk. We didn’t give it all to you, as a little bit of
“extra” research yielded information such as the counter-trend rally
failing at the prior day’s highs (+.03). This price level, the prior day’s high,
is the one that our news
reversal service uses when issuing trade recommendations. For those that
prepared properly, this might have been the extra bit of confirmation that one
needed in establishing a short.