4 Trade Ideas for Johnson & Johnson: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Johnson & Johnson, $JNJ, started moving lower from a top in February. It found support after 3 strong red candles in mid-March and then reversed. The move back higher continued to a new all-time high in April, with the move up actually quicker than the drop. It comes into the new week having retested a key support level and back at short term resistance.

The RSI is turning back up and bullish with the MACD starting to turn up as well and positive. There is resistance at 150.75 and 154.25 then 156. Support lower comes at 147.50 and 144. Short interest is low under 1%. The stock pays a dividend with a 2.69% annual yield and the company is expected to report earnings next on July 16th.

The May 29 Expiry options chain shows the biggest open interest at the 147 strike on the put side but the 152.50 call much bigger as well as the 160 call. June options chain has large open interest at the 145, 140, 135 and 130 put strikes, but again it is much bigger at the 150, 155 and 160 call strikes. The July options, expiring the day after the earnings report, have biggest open interest at the 145 and 140 put strike, with much bigger size at the 155 and 160 call.

Johnson & Johnson, Ticker: $JNJ

Trade Idea 1: Buy the stock on a move over 151 with a stop at 147.50.

Trade Idea 2: Buy the stock on a move over 151 and add a May 29 Expiry 150/147 Put Spread ($1.70) while selling a July 160 Call ($1.65).

Trade Idea 3: Buy the June/July 155 Call Calendar ($1.80) and sell the June 140 Put ($1.62).

Trade Idea 4: Buy the July 135/155/160 Call Spread Risk Reversal ($0.20).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with May options expiration in the record books, sees equity markets seem to have weathered a short term storm.

Elsewhere look for Gold to continue to move higher while Crude Oil retraces its downward move. The US Dollar Index looks to possibly break to the upside while US Treasuries consolidate in their uptrend. The Shanghai Composite looks to slowly drift higher in consolidation while Emerging Markets pause under short term resistance.

The Volatility Index looks to remain elevated but moving lower making the path easier for equity markets to the upside. Their charts are a mixed bag, with the SPY and IWM in consolidation on the shorter timeframe while the QQQ looks to head higher. On the longer timeframe both the QQQ and SPY look strong as they move higher, but with resistance just overhead. The IWM is also at resistance but at relatively lower levels. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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