DailyPlay – Opening Trade (JNJ) Closing Trade (TLT) – December 15, 2023

Closing Trade

• TLT – 66.94% Gain: Buy to Close 11 Contracts (or 100% of your Contracts) Jan 19th $95/$92 Put Vertical Spreads @ $0.41 Debit. DailyPlay Portfolio: By Closing all 11 Contracts, we will be paying $451. We initially opened these 11 Contracts on Dec 13 @ $1.24 Credit. Our average gain, therefore, is $83 per contract. 

JNJ Bullish Opening Trade Signal

View JNJ Trade

Strategy Details

Strategy: Long Call

Direction: Bullish

Details: Buy to Open 3 Contracts Feb 16th $155 Calls @ $6.15 Debit per contract.

Total Risk: This trade has a max risk of $1,845 (3 Contracts x $615) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $615 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher.

1M/6M Trends: Bullish/Neutral

Relative Strength: 4/10

OptionsPlay Score: 88

Stop Loss: @ $3.08 Credit. 50% loss on premium paid)

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 Thursday’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. 

Investment Rationale

As we end the week, we will be closing our TLT position that was opened a few days ago after the price has rallied significantly after the Fed meeting. TLT has now closed in on our price target of $100 and while we maintain our bullish thesis, we will be waiting for any pullbacks for additional long entries. 

Our bullish DailyPlay today is Johnson & Johnson ($JNJ). Price is showing signs of capitulation as momentum swings positive. Additionally, JNJ has experienced a pullback to the low $150s and has found support which provides an excellent risk/reward long position. We will be targeting the Feb monthly contract and the trade structure is a long call as we expect a sharp bullish move. This allows for plenty of upside as the next resistance level sits at the $170 area. 

We will look to Buy the Feb 16th $155 Call @ $6.15 Debit. With a hypothetical portfolio of $100,000, we recommend risking 2% of the portfolio’s value to this trade, which is 3 Contracts for a risk of $1,845. We will set a stop loss on the spread at around 50% loss of the premium paid @ $3.08 Credit.

JNJ – Daily