Will JetBlue Airways recover?

Published on Tuesday, 17 January 2012 19:40 Written by Christopher Lynn

New York, January 17th (TradersHuddle.com) - Shares of JetBlue Airways Corporation (NASDAQ:JBLU) closed the trading session at $5.26 below calculated support at $5.39 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

JetBlue Airways Corporation (NASDAQ:JBLU) provides nonstop passenger flight service.The airline is based in New York and uses John F. Kennedy Airport as its main hub. The company flies to various international destinations and in the United States.

JetBlue's stock was trading in a well defined range with support at $5.39 and resistance at $5.93; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that JetBlue's stock is still near the broken support, traders will be focusing on $5.39 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in JetBlue Airways can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $5.39. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.