Can JetBlue Navigate Through Market Turbulence?

Ed Ponsi

JetBlue Airways is scheduled to report earnings on July 28th before the opening bell. Analysts are expecting a loss of $1.86 per share on revenues of $167 million dollars. 

To say that the airline sector is experiencing a period of turbulence is an understatement. Delta Airlines (DAL) reported a $3.9 billion loss last week, and a 91% decline in revenue. United Airlines also recently posted large losses. 

The interesting thing from a trader's perspective is that Delta Airlines actually climbed higher after its weak earnings report. This tells us that, at least to some degree, negative news is already factored into the airline sector.  

What can the charts tell us about JetBlue? Let's compare the stock to its sector as a whole, and against its individual competitors, to see how the airline stacks up. 

Airlines

The U.S. Global JETS ETF, which is a proxy for the airline sector, is shown in green. Any name appearing above the green line would be considered stronger than average, and names below it are considered weaker than average. Performance measurements are as of the beginning of this year. 

JetBlue, shown in dark blue, is stronger than the JETS ETF, JetBlue is also stronger American Airlines, shown in red, United Airlines in black, and Spirit Airlines, shown in purple. 

Southwest Airlines, shown in light blue, is the only stock that has outperformed JetBlue since the start of the year. 

The fact that JetBlue has outperformed most other airlines is a sign that large institutional traders are less willing to sell it than other names in the sector. With large research departments at their disposal, it's possible that professional traders might have insights into JetBlue that are not available to the average retail investor. 

Ed Ponsi is the managing director of Barchetta Capital Management, and is the author of three books for publisher Wiley Finance. For more information about Ed and his work, click here.