Dykstra: Johnson & Johnson a Healthy Play

The market has been exceptionally volatile in the past week, but yesterday's ferocious buying helped stocks regain a significant portion of their losses from last week.

In times like these, stock movement tends to be biased toward the extremes in either direction. Overall, it remains unclear which way the broader markets are truly heading. I will tell you this: "If you are not on top of your game, and aren't fully aware of what you are doing. Say goodnight!"

With the market all over the map, we will turn to the world's most diversified manufacturer of health care products and services, Johnson & Johnson (JNJ Quote). The stock closed Tuesday at $61.70. With more than 200 companies in 57 countries under the Johnson & Johnson umbrella, and more than 120,000 employees throughout the world, this stock will be our deep-in-the-money call.

Looking back, the drug stocks have not really participated in the bull market. Can you say correction? I believe we still have a way to go before the correction is over. There are a few drug stocks I could pick: Pfizer (PFE Quote) is trading just above $25, and Eli Lilly (LLY Quote) is trading at $52.23, near its 52-week low.

But the class of the pharmaceutical sector is Johnson & Johnson, and our timing couldn't be better, as the stock has not really made any kind of move yet.

We are going to buy 10 of the July $55.00 (JNJGK) deep in-the-money calls, with a limit price of $7.60.