Johnson & Johnson Falls After Earnings, Vaccine Candidate Trial Pause

The equity is up over 14% year-over-year

Deputy Editor
Oct 13, 2020 at 11:09 AM
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Johnson & Johnson (NYSE:JNJ) is making waves this morning, after the company reported third-quarter earnings and revenue that topped Wall Street's estimates. Johnson & Johnson cited a faster-than-expected rebound in procedures utilizing its medical devices was a large factor in its quarterly beat, as well as a strong demand for its cancer drugs. However, separately, the company was forced to pause a clinical trial of its coronavirus vaccine candidate after a participant in the study came down with an unexplained illness. Johnson & Johnson stock is now down 1.7%, last seen trading at $149.24 this morning.

On the charts, JNJ is continuing its trend of trading sideways, plateauing after its late-April recovery and all-time high of $157. In fact, today's slip sent the equity back below $150 after spending the last two session above that territory. The 30-day moving average could provide some support moving forward, after acting as a rejection area in September, and for the year, JNJ boasts a 14.4% lead. 

Meanwhile, in the options pits, calls have been quite popular. In fact, JNJ sports a 50-day call/put volume ratio of 3.45 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 82nd percentile of its annual range. Should this bullish sentiment begin to unwind, it could send the security lower.

Today's options pits are singing a slightly different tune. While over 14,000 calls have crossed the tape so far today, 10,000 puts have also exchanged hands -- eight times the intraday average and volume pacing in the 99th percentile of the last 12 months. Most popular by far is the October 155 call, followed by the 145 put from the same series. 

Now seems like a good time to weigh in on JNJ options, Johnson & Johnson stock's Schaeffer's Volatility Index (SVI) of 23% sits in just the 17th percentile of all other annual readings, meaning the equity sports attractively priced premiums at the moment.


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