Buying Time in JetBlue?
With shares of both Alaska Air Group (NYSE: ALK) and Hawaiian Holdings (NYSE: HA) up more than one and a half percent and nearly two percent respectively on Monday, could other regional airlines – including JetBlue (NASDAQ: JBLU) similarly be scheduled for takeoff in the near-term?
Hawaiian Holdings and Alaska Air Group both had closed lower for four out of the the previous five trading days, becoming technically oversold and reaching new, short-term lows before bounding higher in Monday’s trading. While Alaska Air is coming off new, 52-week highs, the recent new-multi-month highs in Hawaiian Holdings were just as noteworthy – and, apparently, equally powerful in their ability to induce profit-taking in those traders and investors fortunate enough to have bought shares when the stock market put them on sale at the beginning of February.
So is all of this good news for JetBlue? Shares of JetBlue had closed lower for four out of five trading days heading into Monday’s market, which saw the stock gain just over 1%. With most of the stock’s gains on Monday coming in the final hour of trading, the stock’s short-term positive edge is less than what it was near mid-day. But JBLU is still trading below its 5-day moving average and is far nearer to short-term lows than it is to short-term highs.
As such, follow-through to the upside in the stock should not be unexpected. Beginning the day with “consider buying” ratings of 8 out of 10, the stock earned a one-point upgrade intraday before losing that upgrade as JBLU advanced, finishing the session with a 7 out of 10 score.
The current sell-off in JetBlue is the third since the stock climbed back into bull market territory in mid-December. A sell-off that took JBLU lower for four out of five days in late December was followed by five days of consecutive gains that took the stock higher by more than 15%. The second correction arrived in mid-January. Then, a four-session retreat provided the oversold conditions for a 10% rally to new, short-term highs over the following six days.
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David Penn is Editor in Chief of TradingMarkets.com