From consumer health to medtech to pharmaceuticals, the latest stock I'm analyzing is a brand name you will be no stranger to, particularly due to its COVID-19 efforts.
This company's heritage spans over 130 years, boasting trailblazing scientists and innovation that has been at the forefront of safeguarding global public health.
Johnson & Johnson (NYSE: JNJ) has stock performance to match: a chart that has weathered declines and continues to go from strength to strength, with a move of over 140% since 2013.
In terms of a stock that meets my criteria for entry, this ticks all the boxes.
- It has a solid history of performance, as seen on the monthly timeframe below.
- The price is now printing new all-time highs, meaning there will be little in the way of resistance for the next leg up.
- Volume is consistently over 7 million, and over 1 million minimum as per my investing requirements.
- The price is now breaking out from a consolidation that spans back to January 2021.
The one downside to this stock is that corrections of 20% to 30% are not uncommon, and so this stock requires patience.
As the saying goes, the longer the consolidation, the bigger the breakout. Johnson & Johnson has all the hallmarks of a stock that could push to $300 and beyond this year.
This is a stock that I will keep an eye on, and I will add it to my portfolio if the emerging trend displays linearity.
My strategy is to risk small with a wide stop loss. With this method, there is no emotional attachment to the stock and I give the price plenty of space to move. I aim to get stopped out on a trend reversal and not a pullback, an annoying feature to day trading and tight stop losses. You will gain no traction in using tight stop losses.
If the trend fails, I typically walk away with a 1% to 2% loss.
If the trend develops in my favour, I strategically add more positions, exponentially growing my account while keeping my downside and capital well protected.
The hallmark of a good investor is capital protection first and to let the profit come to me.