A strategy idea for options trading investors.

Now that we’re finally into the meat of earnings season, trading opportunities are plentiful.  As we’ve said before, sometimes having too many choices is just as tough as when the schedule is slim. That’s when you look toward the strong companies with records of solid growth.

Up this week is Johnson Controls (NYSE: JCI), the maker of auto parts, batteries, and building mechanical systems. JCI reports on Wednesday before the bell, with analysts expecting no growth from a year ago. That certainly shows low expectations when compared to the average 48% year-over-year gain posted over the past four quarters.

Performance after recent reports has been positive, though hardly exciting. The shares have gained an average of 2% in the week following the past three reports, so we’re not expecting a big move. But the shares are in the middle of a six-month trading range between 38 and 43, so there’s plenty of upside room to pop within the range. The stock is currently pulling back to its 20-day moving average and the 40 level, which both should serve as support.

Sentiment toward JCI is generally positive, though not so much as to interfere with a post-earnings rally.  JCI is in a solid position to benefit from the rebound in new car sales, something that we’ve seen in the past couple of months. And buildings always need HVAC work. So JCI should have a positive outlook along with decent earnings that probably won’t disappoint.

Buy the JCI Aug 40 Call for two bucks or less.

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