by Serge Berger | November 14, 2013 2:43 pm
Airline JetBlue (JBLU), through the eyes of long-term investors, has been fairly dead money in recent years. But for marginally more active investors and traders, JBLU stock continues to provide great opportunities, both quarter after quarter and year after year.
JetBlue stock reacts well to technical analysis, as shares of JBLU respect its various technically important levels. And with its recent major breakout, JBLU stock may now — for the first time in years — again offer something for the buy-and-hold crowd.
Let’s look at both a multi-year chart as well as a closer-up daily chart of JBLU to get an idea of where JetBlue stock stands.
After JBLU slumped during the financial crisis, the stock did not post the v-shaped rebound that a good part of the broader U.S. stock market did. If you look at the long-term weekly chart of JBLU stock, you see it instead settled into a wide sideways trading cycle.
For proactive investors and traders, this continually set up interesting opportunities both long and short side. After making a low in the summer of 2009, shares of JBLU rallied sharply into a January 2009 high around the $7.70 area, which to this date remains an important line for JetBlue stock.
In November 2010, JBLU stock once again bumped into the $7.70 area and was rejected. The third time was the charm, however. JetBlue stock’s steep rally off the November 2012 lows finally gave JBLU nough momentum to pierce past this multi-year resistance one year later.
Through this lens, the breakout earlier this month was of great importance given that it came out of a multi-year basing period.
On the daily JBLU chart, the breakout out of the multi-year basing period and resistance area has admittedly gone somewhat too far too quickly. However, note the positive construct of the chart where consolidation periods of different durations are followed by powerful and clean breakouts.
The most recent breakout for JetBlue stock this Tuesday and Wednesday waspowerful and supported by a massive spike in JBLU trading volume.
The takeaway for JBLU: Longer-term investors can take comfort in the fact that JBLU stock broke past a significant multi-year resistance point a few weeks ago. Quicker traders, on the other hand, may want to wait for some near-term consolidation before trading JetBlue stock from the long side again.
Learn more about the strategies Serge Berger uses to create profits in the market every day. Download his trading plan in the Essence of Swing Trading e-book by clicking here. As of this writing, he did not hold a position in any of the aforementioned securities.
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