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Blue-Chip Pharma Stock Dips on Vaccine Update

Options volume is running at four times what's typically seen

Deputy Editor
Jan 29, 2021 at 10:56 AM
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The shares of Johnson & Johnson (NYSE:JNJ) are down 3.4% at $163.22 at last check, after releasing new coronavirus vaccine data. Though the vaccine was 72% effective in the United States, it was only found to be 66% effective globally -- in the large trial across three continents and against multiple variants. 

The news has JNJ amongst the most actively traded in the options pits today. Right out of the gate, the stock is seeing quadruple its usual amount of options volume. More specifically, 82,000 calls and 18,000 puts have crossed the tape so far. Most popular is the March 185 call, where positions are being opened. 

Today's options pits echo the sentiment of the bullish sentiment seen over last 10 weeks, per JNJ's 50-day call/put volume ratio of 4.81 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all but 1% of readings from the past year, showing long calls being picked up at nearly their fastest rate in 12 months. 

On the analyst front, nine of the 12 in coverage carry a "buy" or better rating on Johnson & Johnson stock. Plus, the 12-month consensus price target of $184.56 is a 13.3% premium to current levels. 

Today's drop has JNJ extending its fall from its Jan. 26, all-time high of $173.65. Now pulling back to support at the 20-day moving average, JNJ is still up 19% in the last three months. A short-term breather could've already been in the cards for the equity, however, as its 14-day Relative Strength Index (RSI) of 72 sits in "overbought" territory.

 
 

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