JetBlue Looks Ready To Fly

06/29/07 08:55:47 AM

by Arthur Hill

After being grounded earlier this year, JetBlue stabilized at long-term support and the June surge looks strong enough to continue.

Security: JBLU
Position: Accumulate

According to the weekly chart, JetBlue (JBLU) has been range bound for more than two and a half years (Figure 1). A resistance zone around 15–17 marks the upper end of the range, and a support zone around 9–10 marks the lower end of the range. In fact, this support zone extends back to the October 2002 lows and marks a major support area for the stock.

FIGURE 1: JETBLUE, WEEKLY. JBLU has been range-bound for more than two and a half years.

Graphic provided by: MetaStock.

The stock firmed just above the support zone over the last few weeks, and a bounce from here would target a move toward the upper end of the support zone. The stock recently traded around 11.5 and a move to 15 would represent a 30% advance.

On the daily chart, JBLU sports a breakout on good volume and this is bullish (Figure 2). The stock based between 9.8 and 11.2 from late April until late June. There was a surge over the last three weeks with above-average volume, and the stock broke above the May highs. This breakout is bullish and strong volume validates the breakout. As noted on the weekly chart, the upside target would be the resistance zone around 15–17.

FIGURE 2: JETBLUE, DAILY. JBLU sports a breakout on good volume, and this is bullish.

Graphic provided by: MetaStock.

The Chaikin money flow confirms strong volume and buying pressure. The top indicator on the daily chart measures buying and selling pressure. The CMF was negative from March to mid-June, and this showed consistent selling pressure. The indicator turned positive toward the end of June and moved to its highest level since November 2006. This shows the strongest buying pressure in over six months and further validates the breakout.

Arthur Hill

Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.

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JetBlue Looks Ready To Fly

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