JNJ Options Signal Bullish Momentum: Key Strike Levels and Trade Setups for Dec 5 Expiry

• JNJ trades at $206.45, down 0.23% from $206.92, but sits above all major moving averages.
• Options open interest shows 767 contracts at the $207.5 call and 1,405 at the $205 put for Friday expiry.
• RSI near 97 suggests overbought conditions, while Bollinger Bands hint at potential volatility expansion.

Here’s the thing: JNJ’s options market is whispering bullish momentum, but the technicals warn of a possible short-term pullback. Let’s break it down.

Bullish Calls vs. Defensive Puts: What the Open Interest Reveals

The options chain tells a story of cautious optimism. For Friday’s expiry, the $207.5 call (JNJ20251205C2075) has 767 open contracts—the most of any strike. That’s not just noise; it’s a price level where smart money is betting on a breakout above recent resistance. Meanwhile, the $205 put (JNJ20251205P205) dominates with 1,405 open contracts, showing hedgers are bracing for a dip.

But here’s the twist: the put/call ratio for open interest is nearly balanced at 0.97. That means no overwhelming bearish or bullish bias—just positioning for directionality. The danger? If the stock gaps below $200 (a level with 651 puts at $200), the defensive puts might not hold.

Spinouts, Stake Increases, and Why the News Matters

Johnson & Johnson’s orthopedics spinout is a mixed bag. On one hand, Leslie Storms’ exit and the creation of a standalone DePuy entity could take years to pay off. On the other, Loomis Sayles just boosted its stake by 57.5% in Q2 2025, and analysts love the dividend yield and long-term healthcare play.

The market isn’t pricing in the spinout’s immediate impact—yet. But the $206.45 price (vs. $207.81 52-week high) suggests investors are still digesting the news. If the spinout smooths operations faster than expected, we could see a rerating.

Trade Ideas: Calls for Breakouts, Puts for Protection

For options traders:

• Bullish Play: Buy the JNJ20251205C210 call (strike price $210, expiry Dec 5). If JNJ breaks above $207.5, this strike offers leverage with limited downside.
• Bearish Hedge: Buy the JNJ20251205P205 put. If the RSI 97.04 corrects, this strike caps losses while retaining upside.

For stock traders:

• Entry: Consider buying JNJ near $206.45 if it holds above the 30D support of $186.43.
• Targets: First resistance at $210 (200D MA is $169.10), then $215.
• Stop: Below $200 would invalidate the bullish case.

Volatility on the Horizon: What to Watch

The next two weeks will test JNJ’s resolve. The Dec 5 expiry could see a pop if the stock holds its ground, but the RSI near 97 warns of a near-term pullback. Longer term, the spinout and institutional buying are tailwinds. My take? This isn’t a "buy and hold" moment—wait for a dip to $200 or a breakout above $210 before committing. Either way, the options market has already priced in movement.

Bottom line: JNJ is a classic case of "the trend is your friend, but you need a bigger friend to trade against it." Right now, the trend is up—but don’t ignore the overbought RSI. Position accordingly.