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There’s a setup I’m watching that combines everything I look for in an earnings play — strong fundamentals, seasonal catalysts and a stock that’s already showing real momentum.
Johnson Controls (JCI) is one of my favorite upcoming earnings plays right now, and it’s not just because of the chart, which is pretty great with the stock up almost 75% the past year and over 20% the past three months.
The company generates most of its revenue through building solutions and technologies, including commercial HVAC, fire and security systems and digital building controls — a mix that ties its performance closely to construction activity, retrofit cycles and climate-driven demand.
The move in the stock over the past year has been solid, as I mentioned. JCI climbed about 70% from April 2023 to April 2024 based on widely available market pricing. A gain of that size in a major industrial name signals strong underlying demand and a market that believes the company is positioned to outperform peers.
Seasonal forces are lining up, too. Historically, JCI has posted stronger bookings and service demand heading into spring and summer as air conditioning systems across commercial and residential buildings face heavier use.
Periods of extreme heat in the Sun Belt often amplify this pattern. In states like Florida, where population growth, new construction and climate intensity continue to rise, HVAC installations, replacements and energy-efficiency upgrades have expanded steadily — a measurable tailwind rather than just a regional anecdote.
Why the Timing Matters
This isn’t just a technical play or an options flow setup. This is a fundamental catalyst trade where the earnings report should validate what the market already suspects: When a company’s doing good, the stock reflects that performance.
For the upcoming quarter, analysts are projecting revenue growth alongside steady margins, with consensus EPS estimates pointing to continued momentum. JCI is scheduled to report on May 7, putting this setup directly in front of a potential volatility event.
Here’s the play and THREE different ways to play it, courtesy of my brand-new K.I.R.A. AI platform — join me at 1:30 p.m. ET to get free access and try it out for yourself!
Seasonality also matters here. The company has historically shown sequential strength in cooling-related segments heading into the warmer months, with service demand and replacement cycles often accelerating.
When you combine that with a stock already trending higher and a business mix that benefits directly from climate-driven demand, the conditions line up for a compelling earnings catalyst.
Playing the Momentum
I like looking for plays where multiple factors line up — and JCI checks a lot of boxes. The stock’s upward trajectory suggests investors may already be pricing in market-share gains, whether through recent customer wins, stronger backlog trends or better-than-peer performance in key segments. Add rising construction activity across the Sun Belt, increased retrofit spending and the annual surge in cooling demand, and you’re looking at a setup with real potential.
This is the kind of setup where I’m not trying to catch a falling knife or predict a reversal. I’m looking to ride momentum that’s already established, with a catalyst that could extend the move. That’s how you put probabilities in your favor.
Keep JCI on your radar as we head into earnings season. The setup’s there, the fundamentals are strong and the timing couldn’t be better.
Order Flow:
This is for informational and educational purposes only. These are not official alerts issued by Lance, but rather some interesting orders picked by the team at Lance Ippolito Trading.
When you look at these plays, always take the market maker move into consideration.
You can be right on the direction but still lose money if the stock doesn’t move enough. That’s where the market maker move comes in clutch.
With puts, they’re often downside hedges in case a stock tanks, especially around earnings. The further out of the money they are, the more likely they are to be hedges.
Also be sure and check when the company’s earnings date is because many of the plays we post here are centered around earnings!
If a stock is really expensive, consider a spread to lower the cost.
And finally, always remember the golden rule when it comes to buying calls: Buy dips, sell rips — and don’t chase!
If a stock’s moved a ton already today, maybe wait for a pullback.
There is inherent risk in trading. Trade at your own risk.
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
The team at Lance Ippolito Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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