Deutsche Bank Eyes Buying Chance After Airline Stock's Pullback

JBLU has fallen sharply in recent weeks

Aug 28, 2019 at 10:14 AM
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JetBlue Airways Corporation (NASDAQ:JBLU) is trying to bounce back after yesterday closing at its lowest point since April, last seen trading up 0.5% at $16.63. Helping JBLU's case is a bull note out of Deutsche Bank, which called the stock's recent pullback an attractive entry point. Most other analysts have a "hold" or "sell" rating on the airline name.

There's plenty of pessimism elsewhere, too. Short interest exploded by 67% in the last two reporting periods, putting four days' worth of buying power in these bears' hands, based on average trading volumes.

Options traders have also taken a put-skewed approach. For instance, the Schaeffer's put/call open interest ratio (SOIR) comes in at 1.29, and ranks in the 94th annual percentile, showing near-term put open interest outweighs call open interest by a wider-than-normal amount. Indeed, peak open interest is at the September 18 put.

Put volume is blowing up out of the gate today, too, with heavy trading at the September 16 put. Overall, more than 1,300 puts have already traded in the first hour of the day, compared to a daily average of just 661.

JetBlue stock may have been due to bounce anyway, since its 14-day Relative Strength Index (RSI) is deep in oversold territory at 24. Plus, the $15.50-$16.50 range has been an area of support during the past year, with the shares right now hovering near the $5 billion market cap level.

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