Beginning in late spring and continuing right through the Brexit, many transportation names, like Delta Airlines, took a walk on the wild side, dipping severely and approaching bearish territory. Higher oil prices were of no help, and a cool economy made it difficult to forecast travel trends. Though airline stocks can more readily respond to negative shocks than in the past, they are sensitive to the economy (and therefore are a good gauge of the economy’s health – or sickness).
Today, Delta Airlines is looking strong. The chart is just breaking out on good turnover, and the stock has enjoyed a series of higher highs and higher lows since the Brexit low – a bullish condition. Though it’s over bought, its relative strength is impressive (note the sharp slope upward).
The gap from July has now been filled, which means the 200 ma at 42.44 is the next resistance level to cross. (The May highs were around 44.) There is still good upside to be had, and with crude oil higher, the airline sector outperformed expectations on Monday – a good sign that institutional buyers are stepping up to the plate.
Delta Airlines (NYSE: DAL) Video Chart Analysis
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About Delta Airlines
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and internationally. The company operates through two segments, Airline and Refinery. Its route network is centered around a system of hubs, international gateways, and airports in Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los Angeles, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, Seattle, and Tokyo-Narita. The company sells its tickets through various distribution channels, including delta.com and mobile, telephone reservations, traditional brick and mortar, and online travel agencies. It also provides aircraft maintenance, repair, and overhaul services; staffing, and professional security and training services, as well as aviation solutions to third parties; vacation packages to third-party consumers; and aircraft charters, and aircraft management and programs. As of February 3, 2016, the company operated a fleet of approximately 800 aircrafts. Delta Air Lines, Inc. was founded in 1924 and is headquartered in Atlanta, Georgia.