Johnson Controls shares surge 3.87% in five-day 15.42% rally as technical analysis confirms bullish momentum

Johnson Controls (JCI) has surged 3.87% in the most recent session, extending a five-day winning streak with a cumulative gain of 15.42%. This sharp rally suggests strong short-term momentum, warranting a detailed technical analysis across multiple frameworks to assess sustainability and potential reversals.

Candlestick Theory

The recent price action features a bullish continuation pattern, with a series of higher highs and higher lows forming a rising channel. Key support levels are identified at $120.78 (Jan 30) and $116.28 (Dec 19), while resistance clusters near $138.23 (Feb 6 high) and $136.24 (Feb 4 high). A potential bearish harami or engulfing pattern could emerge if the price consolidates within a defined range before breaking out, but the current trajectory favors a continuation of the uptrend.

Moving Average Theory

Short-term momentum aligns with the 50-day moving average (~$125–$130), which has crossed above the 200-day MA (~$115–$120), forming a golden cross. The 100-day MA (~$120–$125) provides intermediate support. The price remains well above all three averages, reinforcing the bullish bias. However, a break below the 50-day MA could signal weakening momentum, while a test of the 200-day MA may indicate a consolidation phase.

MACD & KDJ Indicators

The MACD histogram is expanding in positive territory, with the line above the signal line, confirming bullish momentum. The KDJ (Stochastic) indicator shows overbought conditions (K >80), suggesting a potential pullback. A bearish divergence in KDJ may precede a correction, but the MACD’s strength implies the uptrend could persist unless the histogram begins to contract.

Bollinger Bands

Volatility has expanded as the price approaches the upper band (~$138), indicating overbought conditions. The bands’ width suggests heightened trading activity, with a possible breakout or reversal if the price fails to hold above the mid-band (~$128). A contraction in band width would signal reduced volatility and potential consolidation.

Volume-Price Relationship

Trading volume has surged during the rally, validating the price increase. The recent session’s volume (5.37M) is among the highest in the dataset, supporting the sustainability of the uptrend. However, if volume begins to wane while the price continues to rise, it may indicate weakening conviction.

Relative Strength Index (RSI)

The RSI is in overbought territory (>70), consistent with the 15.42% five-day gain. While this typically warns of a potential pullback, the RSI’s sustained overbought level in a strong uptrend may delay a correction. A drop below 50 would confirm weakening momentum, but a bearish divergence is currently absent.

Fibonacci Retracement

Key Fibonacci levels from the recent low ($115.07, Jan 26) to the high ($137.65) include 38.2% at ~$126.50, 50% at ~$126.36, and 61.8% at ~$126.10. A retest of the 50% level could offer strong support, while a break above the $138.23 high would target the next Fibonacci extension at ~$142.

Confluence and Divergences

The most compelling confluence occurs at the 50-day MA and Fibonacci 50% level (~$126.36), where a bullish breakout could accelerate the trend. However, overbought RSI and KDJ levels highlight a risk of near-term profit-taking. A bearish divergence in KDJ without a corresponding MACD slowdown would signal caution, but the expanding Bollinger Bands and strong volume suggest the uptrend remains intact for now.