We screened for stocks showing both strong technical health and a sound consolidation pattern, using a breakout strategy that combines a proprietary Technical Rating of 7 or higher with a Setup Quality Score of 7 or higher. The idea is to identify stocks already in an established uptrend that are pausing to form a base, offering a lower-risk entry point before the next potential leg higher. The current short-term trend in the S&P 500 is positive, providing a favorable market backdrop for such setups. One stock that stood out in this scan is Johnson Controls International (NYSE:JCI).
Technical Strength
The first filter of the breakout strategy requires a stock to have a strong, established uptrend. Johnson Controls scores an 8 out of 10 on the ChartMill Technical Rating, a score that reflects solid technical health across multiple timeframes. This is not a fluke; the data confirms a consistent performance. The long-term trend is positive, and in the short term, the trend is neutral, suggesting the stock is taking a breather rather than reversing.
The stock also outperforms 79% of all stocks in the market on a one-year basis. This relative strength is a core component of the strategy, as it indicates the stock is a market leader. Notably, JCI is trading near its 52-week high, while the S&P 500 is only in the upper part of its own range. This divergence is a positive sign, suggesting the stock is leading the broader market. All key moving averages—the 20-day, 50-day, 100-day, and 200-day SMAs—are rising, confirming a well-established uptrend that aligns with the strategy's goal of finding stocks with the wind at their backs.
Setup Quality
A high Technical Rating alone doesn't create a good entry point. The strategy's second filter addresses the 'when' of the trade by requiring a high Setup Quality Score. Johnson Controls scores a 9 out of 10 on this front, indicating a strong consolidation pattern. The stock has been trading in a range of roughly $136.54 to $149.38 over the last month, forming a base near its highs.
The report identifies a clear resistance zone between $146.12 and $148.22 just above the current price of $146.11. Breaking above this zone would signal the end of the consolidation and the start of a new advance. The presence of a support zone below at $133.90 to $145.46 provides a clear area for a potential stop-loss order, which is a key element of this strategy. Further reinforcing the setup is a recent "Pocket Pivot" signal—a price/volume accumulation pattern indicating institutional buying. This combination of a tight consolidation, a defined resistance level, and signs of accumulation is precisely what the screening process is designed to catch.
For investors looking to scan for similar opportunities, there are fresh breakout setups appearing in the market every day. You can run the same screen used in this analysis for yourself by visiting the Technical Breakout Setups screen to generate a current list of stocks meeting these same criteria.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading and investing in stocks involves risk, and past performance is not indicative of future results. Always conduct your own due diligence before making any investment decisions.
Read full article here »
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Johnson Controls International (NYSE:JCI) Shows Strong Breakout Setup With High Technical and Quality Scores
We screened for stocks showing both strong technical health and a sound consolidation pattern, using a breakout strategy that combines a proprietary Technical Rating of 7 or higher with a Setup Quality Score of 7 or higher. The idea is to identify stocks already in an established uptrend that are pausing to form a base, offering a lower-risk entry point before the next potential leg higher. The current short-term trend in the S&P 500 is positive, providing a favorable market backdrop for such setups. One stock that stood out in this scan is Johnson Controls International (NYSE:JCI).
Technical Strength
The first filter of the breakout strategy requires a stock to have a strong, established uptrend. Johnson Controls scores an 8 out of 10 on the ChartMill Technical Rating, a score that reflects solid technical health across multiple timeframes. This is not a fluke; the data confirms a consistent performance. The long-term trend is positive, and in the short term, the trend is neutral, suggesting the stock is taking a breather rather than reversing.
The stock also outperforms 79% of all stocks in the market on a one-year basis. This relative strength is a core component of the strategy, as it indicates the stock is a market leader. Notably, JCI is trading near its 52-week high, while the S&P 500 is only in the upper part of its own range. This divergence is a positive sign, suggesting the stock is leading the broader market. All key moving averages—the 20-day, 50-day, 100-day, and 200-day SMAs—are rising, confirming a well-established uptrend that aligns with the strategy's goal of finding stocks with the wind at their backs.
Setup Quality
A high Technical Rating alone doesn't create a good entry point. The strategy's second filter addresses the 'when' of the trade by requiring a high Setup Quality Score. Johnson Controls scores a 9 out of 10 on this front, indicating a strong consolidation pattern. The stock has been trading in a range of roughly $136.54 to $149.38 over the last month, forming a base near its highs.
The report identifies a clear resistance zone between $146.12 and $148.22 just above the current price of $146.11. Breaking above this zone would signal the end of the consolidation and the start of a new advance. The presence of a support zone below at $133.90 to $145.46 provides a clear area for a potential stop-loss order, which is a key element of this strategy. Further reinforcing the setup is a recent "Pocket Pivot" signal—a price/volume accumulation pattern indicating institutional buying. This combination of a tight consolidation, a defined resistance level, and signs of accumulation is precisely what the screening process is designed to catch.
For investors looking to scan for similar opportunities, there are fresh breakout setups appearing in the market every day. You can run the same screen used in this analysis for yourself by visiting the Technical Breakout Setups screen to generate a current list of stocks meeting these same criteria.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading and investing in stocks involves risk, and past performance is not indicative of future results. Always conduct your own due diligence before making any investment decisions.
Read full article here »