Johnson Controls is another interesting stock and one I last considered a little more recently than ALK, in fact in March this year, the 18th to be precise, and at the time it was trading around the $60 per share level and had fallen and recovered on good volume, a clear signal of further buying intent by the market makers. Here is what I said at the time:
Finally, it is interesting to note the most recent price action over five candles. Here we have had three days of rising prices and falling volume, a sign of short-term weakness that duly occurred over the last two days. However, yesterday saw the buyers step in once more on high volume on a narrow spread candle, so this stock is not breaking down just yet, and we can expect to see further upside in due course.
So what has happened since?
The stock has moved steadily higher and is currently trading at $63.50 per share and with more to come on the weekly chart. Interestingly the structure of this chart is similar to that of Alaska Air with the plunge in early 2020 followed by congestion, accumulation, and recovery. However, note the anomalous candle in March of the heaviest volume on this timeframe and associated with a narrow spread candle signaling the start of the accumulation by the market makers as they step in to buy in preparation of a new campaign to take the stock higher. This is repeated in June as it gets underway with further buying in evidence. The difference here between ALK and JCI is that on the JCI chart there are no signs of weakness yet on the recent price action. In fact the reverse, so we can expect to see more from this stock. However, be aware the next quarterly earnings are due on Friday this week before the market opens with the consensus set at $0.49 per share. Last time around the company exceeded analysts’ expectations at $0.43 vs $0.40, and if exceeded again this may provide a further injection of momentum.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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