Chart of the Day – $JNJ and $PFE for Talking Numbers

by Enis January 15, 2013 11:28 am • Commentary

Here’s a preview of what I’ll be discussing on Talking Numbers today around 3:30 pm EST on CNBC:

JNJ and PFE have both been strong stocks to own in my favorite sector, health care (see my post back in September detailing the merits of the sector).  JNJ and PFE are names with a similar valuation multiple (12-14 P/E) and around a 3.5% dividend yield.  So when we look at the charts, it’s no surprise that they’re quite similar as well.

However, there has been a discrepancy in recent performance, which I’ve illustrated with the 1 year charts.  First, JNJ’s 1 year chart shows that the stock has not been able to cleanly break out above its Oct. high, struggling to get over the hump in the past 2 days:
Screen Shot 2013-01-15 at 11.01.14 AM
The chart of PFE, in contrast, shows more recent demand, as it cleanly broke about the previous Oct. high to start the year, and has no remaining recent overhead supply to contend with here:
Screen Shot 2013-01-15 at 11.12.54 AM
Buyers have been more aggressive in PFE, and that bodes well for the stock’s prospects over the next few months.  Going forward, I would look for the $26 area to serve as support for PFE shares.