Today we've chosen to take a look at Johnson Controls Inc. (NYCE:JCI) because it is testing an influential level of resistance. As you can see from the chart below, the bulls have tried to push the price above the 200-day exponential moving average several times since the start of 2008, but each time they are met with a wave of selling pressure. We've also noticed that a symmetrical triangle has formed on the chart. Bullish traders will want to wait until the price is able to move above the nearby resistance before they consider entering a position. The triangle is often regarded as a neutral signal until the price moves beyond one of the price barriers.
We expect that bearish traders will watch for a bounce off the nearby trendline and will try to send the stock toward $33. A break below the lower trendline will signal a continuation of the downtrend and it will likely be followed by another wave of sell orders.