Playing Defense

Defensive stocks often perform well when there is uncertainty in the market. The caveat here, though, is just because the stock is doing well does not mean the underlying business will perform well. Johnson & Johnson (JNJ) has been one of those names. I think J&J may outline the theme for the week going into earnings, which is strength will probably be best played with puts, while weakness may see upside reactions, making calls or call spreads attractive.

For J&J, I have entered some July 20 $70-$67.5 put spreads at $1.44 and $1.48. The chart is strong, as the price is showing another breakout move, but price is a bit extended....296 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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