Question 1: When is it a better time to buy Johnson Controls stock - after a drop or after a rise?Answer:Consider two situations,Case 1: Johnson Controls stock drops by -5% or more in a monthCase 2: Johnson Controls stock rises by 5% or more in a month
JCI stock fares better after Case 1, with a 64.9% chance of rise over the next month (21 trading days) under Case 1 (where the stock has suffered a 5% loss over the previous month), versus, a 63.0% chance of rise for Case 2. This would suggest that it is better to buy JCI stock after a recent drop
Try the Trefis machine learning engine to see for yourself how Johnson Controls stock is likely to behave after any specific gain or loss over a period.
Question 2: Does Johnson Controls stock have a higher chance of rise after a steeper drop?Answer:Trefis machine learning engine's calculations show that for most stocks, the chance of rise reduces as the drop gets steeper. However, after unusually high declines of -10% or more, there is usually an improvement in the chance of rise. This makes sense intuitively, as markets often overreact to bad news around a company
For JCI stock, the probability of positive returns over the next month (21 trading days) after a drop of N% over the last 21 trading days is detailed in the table below, along with the positive return probability for the S&P500:
Previous 21 days% DropNext 21 daysPositive Return ProbabilityJCI S&P 500-1%61.1%71.1%-3%61.8%73.0%-5%64.9%72.7%-7.5%70.1%78.3%-10%79.6%78.4%
Question 3: What about Johnson Controls stock's chance of rise after a recent rally?
Answer:JCI's probability of positive returns over the next month (21 trading days) after a gain of N% over the last 21 trading days is detailed in the table below, along with the positive return probability for the S&P500:
Previous 21 days% RiseNext 21 daysPositive Return ProbabilityJCI S&P 500+1%62.4%67.8%+3%63.1%68.5%+5%63.0%67.0%+7.5%60.2%68.4%+10%58.2%74.2%