TRADE OF THE DAY: JBLU Stock About to Take Off

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JetBlue Airways Corporation (JBLU) — I last featured JBLU stock as the Trade of Day on Feb. 9, recommending traders buy it with a target of $22. It hit a 52-week high over $27 in mid-September.

For its third quarter, the discount airline beat the consensus earnings expectation by a penny, reporting 58 cents per share, a 142% increase from the year-ago period. Revenue of $1.69 billion, up 10.5% year over year, also came in above estimates.

Following the announcement, S&P Capital IQ Equity Research raised its price target to $34 from $30. Its analysts rate JBLU stock a “strong buy.”

They also increased their EPS estimate for 2015, to $1.91 from $1.80, and 2016, to $2.16 from $2.04. Its analysts note JetBlue has accelerated revenue growth and grown capacity faster than its peers.

Since the airline only flies in the United States and Caribbean, international threats are at a minimum, and domestic demand is growing.

Except for the August market correction, JBLU stock has traded in a powerful, low-volatility channel, currently between $25 and about $27. It flashed a buy signal from my proprietary indicator, the Collins-Bollinger Reversal (CBR), in October at about $24. After that, shares experienced a minor selling climax at about $25.

It has consistently traded around its 50-day moving average, now at $25.64. On Friday, its MACD indicator flashed a new buy signal, bouncing off of an oversold condition.

Buy JBLU stock under $26 with a price target of $34 within six months for a potential return of more than 30%.

JBLU Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2015/11/jetblue-airways-corporation-jblu-trade-of-the-day/.

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