4 Trade Ideas for Johnson & Johnson: Bonus Idea

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

Johnson & Johnson, $JNJ, comes into the week moving higher off a higher low at the end of May. It is approaching both resistance and the 200 day SMA as price moves up along the rising Bollinger Bands®. The RSI is bullish and rising, on the cusp of overbought, with the MACD positive and moving higher. There is resistance at 166.25 and 167.50 then 170 and 172.50 before 174 and 175.25. Support lower is at 163.75 and 162.50 then 161 and 160. Short interest is low under 1%. The stock pays a dividend with an annual yield of 2.90% and has traded ex-dividend since May 22nd.

The company is expected to report earnings next on July 20th. The July options chain shows open interest focused at the 150 put strike and then at the 175 and 165 calls. In the August chain open interest is building and spread from 160 to 140 on the put side, while from 160 to 170 on the call side. The September chain has biggest open interest at the 150 put then the 160 strike. On the call side it is spread from 160 to 170 then big again at 195.

Johnson & Johnson, Ticker: $JNJ

Trade Idea 1: Buy the stock on a move over 166.25 with a stop at 163.25.

Trade Idea 2: Buy the stock on a move over 166.25 and add a July 160 Put ($1.13) while selling an August 175 Call (49 cents).

Trade Idea 3: Buy the July/August 170 Call Calendar (81 cents) while selling the August 155 Put (84 cents).

Trade Idea 4: Buy the September 155/170/175 Call Spread Risk Reversal (3 cents).

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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 the June Quadruple Witching and FOMC meetings in the books, saw equity markets show continued strength.

Elsewhere look for Gold to continue its consolidation under 2000 while Crude Oil consolidates in a broad range. The US Dollar Index continues to drift lower in the broad consolidation while US Treasuries also move sideways. The Shanghai Composite looks to continue the short term move higher while Emerging Markets move up in consolidation.

The Volatility Index looks to remain very low and stable making the path easier for equity markets to the upside. Their charts look strong, especially on the longer timeframe. On the shorter timeframe both the QQQ and SPY could us a reset on momentum measures as both are extended with the IWM in consolidation in the new short term uptrend. 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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