JetBlue Airways Corporation (JBLU) Traders See Higher Highs Ahead

JetBlue Airways Corporation (JBLU) traders bet on another move north of $20

by Griffin Kruse

Published on Apr 21, 2015 at 2:43 PM
Updated on Apr 21, 2015 at 2:43 PM

JetBlue Airways Corporation (NASDAQ:JBLU) has been a technical beast, with the shares advancing nearly 25% year-to-date to hit $19.80, including a 1.2% gain today. What's more, the stock notched a decade-plus high of $20.25 on April 13. Today, options traders are picking up short-term calls at a rapid-fire clip, with some speculators anticipating more upside for the stock (perhaps after its trip to the earnings confessional on April 28).

Drilling down, calls are changing hands at three times their average intraday rate, and are outpacing puts by a staggering 28-to-1 margin. The day's most active contract by a landslide is the May 19 call, where buy-to-open activity has been detected. By purchasing this call at a volume-weighted average price (VWAP) of $1.17, traders predict the shares will muscle north of $20.17 (strike plus VWAP) by the close on May 15, when the contract expires.

On the earnings front, JBLU shares advanced 8.8% in the session after reporting in January. The positive earnings reaction snapped a notable losing streak for JBLU, after no fewer than seven straight post-earnings dips.

Despite JBLU's impressive price action, short sellers have taken a shine to the security of late. Short interest accounts for 17.7% of JBLU's available float, which would take over seven sessions to cover, at average trading volumes. However, short interest declined by nearly 5% over the past reporting period, and a continued exit of short sellers could provide tailwinds for the shares.

Elsewhere, the brokerage bunch has mixed opinions of JetBlue Airways Corporation (NASDAQ:JBLU), as 38% of covering analysts rate it a "hold" or "sell." Additionally, JBLU's consensus 12-month price target of $21.85 represents just a 10% premium to current trading levels. Should JBLU continue its uptrend, a round of analyst upgrades and/or price-target hikes could boost the shares even higher.

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