Johnson & Johnson (JNJ) – Pharma Resurgence – July 13th, 2020
Bullish – JNJ – $142.37
Markets ended the week on a strong note, testing its major $317 resistance level at the close. Our base case for next week is for banks to beat earnings and propel the S&P 500 (SPY) above this major level to test $323 next and potentially $339 extended upside targets over the next couple of months.
SBUX Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang looked at JNJ and the opportunity its recent weakness provides. With its relative underperformance, JNJ is currently trading at a very reasonable valuation of 17x earnings. With strong estimate revisions and relative strength this past week, JNJ scans well for an earnings beat next week. Expecting JNJ to rise higher, Tony is using a July 31 $143/$150 Call Vertical @ $2.25 Debit. As of Friday’s close, these calls were trading for $2.45 Debit.
We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience.
Risk Less with Options
Risk less in your portfolio using options, learn how to maximize your gains by minimizing losses. Watch Video
Market Outlook Update
Join Tony Zhang from CNBC’s Options Action Tues and Fri mornings on an exclusive look at the markets – Join Us