Looking for a Range in JNJ

[Steven Place]

The stock has retraced the majority of its ugly selloff. What’s telling here is that over the past month, the actual volatility has been around 19.

A 19 vol is pretty high for JNJ. They’re not a momentum stock, and I expect that it will settle into a range, or at the least grind higher with lower volatility.

The trade here is a “tiered” trade, meaning only 1/3 of size is up on

Buy JNJ Mar/Apr 92.50 Put calendar for 0.60

If JNJ moves to 95 or 90 we will add another round of calendars. If it then moves to 97.50 or 87.50, the final round. If it continues a trend, we will roll.

Target is 20% of max risk.

[Steven Place]

JNJ did exactly what we needed it to do — fart around.

Opex is close, make sure you’re out by Friday

[Author]

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