DailyPlay – Opening Trade (JNJ) – October 24, 2024

JNJ Bullish Opening Trade Signal

Investment Rationale

Johnson & Johnson (JNJ) rebounded from its $160 support level after breaking above resistance, indicating potential to reach its $170 target. The stock has climbed to around $165, about halfway to that goal. While JNJ is expected to grow slightly slower than the industry average, its superior profitability, including higher net margins, justifies its premium valuation relative to peers. This strong profitability is a key factor supporting the stock’s potential for further upside. In this marketplace, we’re looking at a neutral-to-bullish put vertical spread or a bull put spread, a less aggressive approach that allows us to sell some of the general market volatility.

JNJ – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 5 JNJ Nov 29 $160/$155 Put Vertical Spreads @ $0.83 Credit per Contract.

Total Risk: This trade has a max risk of $2,085 (5 Contracts x $417) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $417 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to break higher off recent support.

1M/6M Trends: Bullish/Bullish

Relative Strength: 8/10

OptionsPlay Score: 135

Stop Loss: @ $1.66 (100% loss to the value of premium received)

View JNJ Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Wednesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View JNJ Trade