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JetBlue Tumbles on Delays, I Cry “Wolf!”
Posted by Blain Reinkensmeyer
February 20, 2007 at 11:24 am
If you haven’t heard the news on JetBlue (JBLU) from the weekend, then I will update you now with the latest headline from Yahoo Finance,
“JetBlue Airways Corp. (NasdaqGS:JBLU - News) said on Tuesday reimbursing passengers stuck on about 1,000 delayed flights and updating its operations to prevent further problems could cost the airline $30 million or more, sending its shares down more than 6 percent.”
What doesn’t make sense here? JetBlue error costs the company $30 million, so the stock loses over $120 million in market capitilization? I think this is a reason to buy the stock, which is trading currently around $12.80, and look for a move back above $13 by tomorrow. Let’s take a look at a chart and imply some technical analysis,
Look at the gap down today below $13, and you can see the void missing now in the chart. Also take a look at the MACD, which is very close to oversold terrritory, and looks as if it may make a move back to the upswing by today’s end. I think $13.50 would be a decent target price this week for the stock, which it shouldn’t have too much trouble reaching unless there is some underlining information we are not aware of.
But, like any position taken, protecting yourself on the downside is just as important as predicting the upswide. If the stock falls below $12.50, this would be a valid argument to sell any position and walk away with a minimal loss.
Happy Hunting.
[...] you get to read my post on JetBlue’s (JBLU) overreaction sell off yesterday? Well, today today the stock is up nearly 4% right out of the shoot, and I just sold out [...]