JBLU has formed a double bottom pattern on the weekly chart. This pattern is formed when price falls to a support level twice, but is unable to break through. The second bottom is typically higher than the first, indicating that buyers are becoming more aggressive.
A close below 3.40 on a weekly basis would be a stop-out for this pattern, as it would indicate that the bears are taking control and that the pattern has failed.
How to trade this pattern:
If you believe that the double bottom pattern is valid, you could buy JBLU above the neckline of the pattern (which is currently around 3.60). You would then place a stop-loss below the 3.40 level.
If JBLU breaks through the neckline of the pattern, it would be a bullish signal and could indicate the start of a new uptrend. You could then trail your stop-loss up above the previous swing high.
A close below 3.40 on a weekly basis would be a stop-out for this pattern, as it would indicate that the bears are taking control and that the pattern has failed.
How to trade this pattern:
If you believe that the double bottom pattern is valid, you could buy JBLU above the neckline of the pattern (which is currently around 3.60). You would then place a stop-loss below the 3.40 level.
If JBLU breaks through the neckline of the pattern, it would be a bullish signal and could indicate the start of a new uptrend. You could then trail your stop-loss up above the previous swing high.