JetBlue Airways Corporation (NASDAQ: JBLU)

JetBlue Airways Corporation, a passenger carrier company, provides air transportation services. As of December 31, 2016, the company operated a fleet of 37 Airbus A321 aircraft, 130 Airbus A320 aircraft, and 60 Embraer E190 aircraft. It also served 100 destinations in 29 states in the United States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and 21 countries in the Caribbean and Latin America.

Take a look at the 1-year chart of JetBlue (NASDAQ: JBLU) below with my added notations:

1-year chart of JetBlue (NASDAQ: JBLU)

Over the past 3 months, JBLU has created a trendline of support (green), which would also be the “neckline” for the stock’s potential head and shoulders (H&S) continuation pattern. Above the neckline you will notice the H&S pattern itself (red) forming.

Confirmation of the H&S would occur if JBLU were to break the support, and lower prices would be expected from there.

The Tale of the Tape: JBLU looks to be forming a head & shoulders pattern. A long trade could be made at the trendline with a stop placed below that level, but ideally, the pattern implies a short trade to be entered on a break below that level instead.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT