Triangle Breakout with Targets for JetBlue Airways JBLU

Dec 11, 2015: 12:07 PM CST

Uptrending Stock JetBlue (JBLU) broke under a key support level today, triggering an opportunity for traders.

What’s the trading opportunity and target with the breakdown?

Let’s check it out!

JetBlue Airways (JBLU) continued a very strong trend through 2015, retracing twice into June and August.

September to December saw a sideways trading range (consolidation) that took the form of a Triangle.

The upper resistance and lower support trendlines developed toward $26.00 and $24.50 per share.

Today, we see a gap-down and trend day breakout lower under the $24.50 level on a sudden test of the first support target near $24.00 per share.

The play here – for aggressive traders – is to trade through the bearish “breakout” pathway toward $22.50 (the rising 200 day SMA) or even $24.00 (the price low from August).

Any bearish trade would be overruled or invalid if price suddenly bounces up off $24.00 and re-enters the triangle ($24.75).

Here’s the Weekly Chart for more targets and perspective:

We see that the strong uptrend began with the 2013 breakout above the $8.00 per share level.

The rising 20 week EMA (green) served as a target for retracements to end and a good spot to enter swing trades into the rising support level that continued with the trend.

Now, we see our first potential threat – or breakdown – under this rising floor of support since late 2014.

An initial break of the rising 20 week EMA opens a sell (bearish) pathway toward the rising 50 EMA.

That target aligns with the lower weekly Bollinger Band near $21.50 per share (roughly $22.00).

Focus your attention – and trades – on the departure from $24.00 and act accordingly if you’re willing.

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Corey Rosenbloom, CMT
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