Johnson Controls International (NYSE:JCI) Shows Strong Technical Breakout Potential with High Ratings

Technical breakout strategies focus on identifying stocks with solid momentum that are moving within a specific range, providing a possible entry point before the next upward move. This method uses two main metrics: a high Technical Rating to confirm the stock’s upward trend and a high Setup Rating to find low-risk entry points. JOHNSON CONTROLS INTERNATIONAL (NYSE:JCI) currently matches this approach, showing both technical strength and a promising consolidation pattern.

Technical Strength: The Basis for Momentum

Johnson Controls International has a Technical Rating of 8, indicating its strong trend across various timeframes. Key points from the technical report include:

• Long-Term Uptrend Continues: Despite short-term sideways movement, the stock remains in a positive long-term trend, trading near the top of its 52-week range.
• Relative Strength: JCI has performed better than 86% of all stocks over the past year, with steady gains spread evenly over the period. It also ranks in the top 13% of its industry, building products.
• Moving Average Support: The stock is above rising 50-day, 100-day, and 200-day moving averages, a sign of continued upward momentum.

These factors match the breakout strategy’s goal of picking stocks with clear upward trends, lowering the chance of false breakouts.

Setup Quality: Tight Consolidation Hints at Opportunity

With a Setup Rating of 9, JCI shows the consolidation traits ideal for breakout traders:

• Clear Support and Resistance: The stock has moved between $102.09 and $112.63 over the past month, with resistance starting at $105.91. A move above this level could signal the next upward push.
• Lower Volatility: The narrowing price range and decreasing volatility (ATR of 2.39%) suggest a possible buildup before a directional move.
• Pocket Pivot Signal: Recent buying activity, marked by a pocket pivot (a price rise with volume support), adds further evidence of institutional interest.

The setup’s strength lies in its clear risk-reward setup: a breakout above $107.04 (just above resistance) with a stop-loss below $105.41 (support) offers a controlled 1.5% risk per trade.

Why This Matters for Breakout Traders

The mix of strong technicals and a high-quality setup aligns with the core principles of breakout trading:

1. Trend Confirmation: A high Technical Rating confirms the stock is already in an upward phase, increasing the likelihood of continuation.
2. Low-Risk Entry: The Setup Rating spots consolidations where breakouts are more likely to work, with nearby support levels to limit downside.

For traders looking for similar opportunities, the Technical Breakout Setups screen provides daily updates on stocks meeting these criteria.

Disclaimer: This analysis is not investment advice. Always conduct your own research and consider risk management strategies before trading.