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Market Trend: Still Up - But Watch For June


Jan 24 2011 / Stock - Johnson and Johnson - Stock Symbol JNJ

Stuck In A Range


JNJ STOCK - What A Great Performer

What a great performer. Anyone who is buying JNJ for capital gain may wait a while. The stock has been stuck in this trading range since November. MACD indicates sideways momentum in the stock. My strategy remains to stay at the $62.50 and $65 levels. If the stock should rally which I expect it eventually will, and retest the November Highs, I may then close my $65 naked puts and wait to see if the stock can hold at a higher valuation. If someone was worried about being assigned, then the $60 strike is the best place to be, but the premiums are low, since the volatility is low. I want to keep selling at the money for the biggest premiums as my eventual goal is to own shares, but with other's peoples' capital. 

Today I sold the $62.50 put again. The strategy is to sell one or two months out and wait for the premium to evaporate in the put, buy it back for .15 or .20 cents and roll again. I have plenty of capital free in the event that the trend breaks to the downside and I can write calls back to the 57.50 level.

JNJ Stock - Nov 2010 to Jan 2011




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