JNJ Options Signal Bullish Bias at $180–$182.5 Strikes: Earnings Catalyst and Pharma Momentum Fuel Upside Breakout Potential

• Johnson & Johnson (JNJ) trades at $179.39, up 0.93% on heavy volume, with Bollinger Bands tightening near key resistance at $179.66.
• Options data reveals a 0.83 put/call open interest ratio, with top call OI concentrated at $180–$182.5 strikes and puts at $170–$172.5, signaling a bullish skew.
• Upcoming Q3 2025 earnings on October 14 and FDA approvals for INLEXZO™ and Tremfya position JNJ for a potential 14.9% EPS-driven rally.

The confluence of technicals, options positioning, and earnings optimism suggests a high-probability upside breakout scenario for JNJ. With the stock perched above its 30-day moving average ($177.14) and RSI hovering near 48, the market is pricing in a post-earnings surge while hedging against regulatory risks. Let’s dissect the actionable opportunities.

Bullish Skew in OTM Options: $180–$182.5 Call OI Dominates

The options chain reveals a stark imbalance: 4,447 open interest at the $180 call (this Friday’s expiry) and 988 at $182.5, compared to 5,404 puts at $170 and 2,987 at $172.5. This 0.83 put/call ratio (call OI outpacing puts) indicates aggressive bullish positioning, particularly at strikes 0.7%–1.5% above the current price. The $180 call is the most liquid, suggesting institutional bets on a post-earnings pop or a rally driven by the FDA’s recent approvals.

However, the heavy put OI at $170–$172.5 (10–15% below current price) signals hedging activity against the South Africa drug pricing investigation and talcum powder lawsuits. While the stock’s 200-day support at $154.72 remains distant, the 30-day support zone ($178.06–$178.16) offers a critical short-term floor. Traders should monitor the $177.35 intraday low as a near-term test of conviction.

Earnings Optimism vs. Regulatory Headwinds: A Dual-Edged Sword

The Q3 2025 earnings report on October 14 is the most immediate catalyst. Analysts expect a 14.9% EPS increase, driven by strong performance in oncology (INLEXZO™, RYBREVANT®) and immunology (Tremfya). The FDA’s approval of a subcutaneous Tremfya regimen for ulcerative colitis expands market access for 3 million U.S. patients, adding $100M+ in incremental revenue potential.

Yet, the South Africa investigation and talcum powder lawsuits pose asymmetric risks. The former could force pricing concessions in a key market, while the latter threatens $1.2B+ in liabilities. However, JNJ’s recent shift from bankruptcy settlements to litigation in talcum cases has stabilized its legal costs, and its pharma portfolio (13 drugs with double-digit growth) remains a moat. The stock’s 23.4% YTD gain in 2025 reflects resilience despite these headwinds.

Actionable Trade Ideas: Calls at $180–$182.5, Puts at $170 as a Hedge

For options traders, the $180 call (this Friday’s expiry) offers a high-conviction play if JNJ breaks above $179.66 (Bollinger Upper Band). With 4,447 open interest, this strike is the most liquid and aligns with the 30-day moving average as a psychological floor. A $182.5 call (988 OI) could be added as a second leg for a diagonal spread if the stock holds above $178.05.

For stock traders, consider entry near $178.05 (30-day support) with a stop-loss below $177.35. The first target is $182.5 (call-heavy zone), followed by $185 (682 OI). For downside protection, the $170 put (5,404 OI) offers a cheap hedge against a 5% drop, especially if the South Africa probe escalates.

Volatility on the Horizon: Earnings and FDA-Driven Moves

The next two weeks will be pivotal. A beat on earnings could propel JNJ toward $185–$190, where the 200-day moving average ($159.08) becomes a distant floor. Conversely, a miss or regulatory escalation could trigger a test of the $174.34 Bollinger Lower Band. Traders should prioritize liquidity at the $180–$182.5 calls and $170 puts, while watching volume spikes as a contrarian signal. The key takeaway: JNJ’s options market is pricing in a post-earnings rally, but the path to $185 remains contingent on legal and regulatory outcomes.