Delta DAL and Southwest LUV have a massive performance spread over JetBlue JBLU that, if closed, would yield a substantial profit.
I like the JBLU chart because it has the appearance of having a top or "head and shoulders" pattern to make technical traders jump all over it. It had a recent breakdown which gave it the look that it would break-down but what appears to be the case is that the stock is actually accumulating and if it can climb just a little further it could squeeze out any shorts in a fast rally to a breakout.
What I can see here is that money is likely coming off the table in LUV and DAL and those stocks could come under pressure as investors cash out and move to other stocks in the group that offer more value.
Risk 5%, Reward 10%-15% in one month. Measure the pure price spread between these securities.
JBLU vs DAL
JBLU vs LUV
Tim 11:08AM EST 3/25/2014 JBLU 8.63 last +0.10