JetBlue Airways Corp. - JBLU - close: 6.96 change: +0.11

Stop Loss: 6.58
Target(s): 7.45
Current Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Airline stocks have managed to hold up pretty well in the face of rising oil prices. The XAL airline index has reversed higher after a bearish breakdown in December. JBLU looks ready to run higher as it bounces from what looks like a short-term bull-flag pattern. On a short-term basis JBLU could make a run at its 2010 highs. Any strength could spark a short squeeze. The most recent data listed short interest at 21% of the 228 million-share float.

I am suggesting very small bullish positions now. We'll use a stop loss at $6.58. Our target is $7.45. We want to exit in front of the late January earnings report.
FYI: The Point & Figure chart for JBLU is bullish with a $12 target.

Open Small Bullish Positions Now (at current levels)

Suggested Position: JBLU stock @ current levels

- or -

Buy the 2011 February $7.00 call (JBLU1119B7) current ask $0.35

Annotated chart:

Entry on January 13 at $xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on January 12th, 2010