Mead Johnson Nutrition Company (MJN)

Last time I checked in with Mead Johnson Nutrition Company (MJN), we had seen a recent gap that re-took the 200 day SMA and was holding.  My ideal set-up was for some continued consolidation above the 200 day and then a next leg higher which could ultimately reach the 90’s.  After not much consolidation we saw MJN start to move and after reaching $80, that was it.

The negative sentiment seemed to stem from a report that China is cracking down on formula products coming in from Honk Kong.  This news also prompted Credit Suisse to lower estimates for MJN and rate the shares with a Neutral and $76 price target.

The technical set-up has definitely changed in MJN but there is also still some opportunity if the uptrend line can hold and provide a support region.  If it does, MJN might not be immediately off to the races again but will likely then bounce between support and resistance while carving out better a base to move from.