Johnson & Johnson reports earnings and desperately needs you to care about something other than the fact that their stock goes up when interest rates go down. The healthcare giant wants attention for its "exciting new products and pipeline." Those are their words. Exciting.
Rotation winner is Wall Street speak for "your shares moved because money sloshed around, not because you picked a good company." It's like getting a participation trophy except the trophy costs you capital gains tax. J&J got lumped into the defensive trade when everyone panicked about tech valuations. Their price went up. They did nothing to earn it. Now they're offended by the implication.
The company plans to showcase new products during the earnings call. They will present pipeline data. Analysts will nod thoughtfully and pretend the stock won't just track the 10-year Treasury yield anyway. Some portfolio manager in Greenwich will mute the call after six minutes to take a meeting about his boat.
Retail traders who bought J&J in the last three months think they made a value play. They read an article about dividend aristocrats. They diversified away from their NVIDIA position. They felt responsible. Then the stock went up four percent because a bond auction went poorly and defensive names caught a bid. They think they're investors now.
The chart shows a clear resistance level at $162. Support sits at $155. None of this has anything to do with their pharmaceutical pipeline. The Relative Strength Index says overbought. The MACD says who gives a f*ck about your new cancer drug when the Fed might cut rates.
J&J could announce they cured death and the stock would still just do whatever healthcare sector rotation dictates that week.
Photo by Mathew Browne on Unsplash
Leave a Comment