With the Focus on United UAL, Delta DAL May be Ready for a Bounce

Apr 11, 2017: 2:53 PM CST

While we’re watching the stock price of United and the passenger incident, we’re perhaps not watching what’s happening with Delta’s (DAL) stock which is at a critical pivot price.

What’s going on with Delta’s stock and how might it be ready for a bounce off a key target?  Let’s see:

I couldn’t resist discussing United Airlines (UAL) this morning, but Delta Airlines (DAL) might be the more stable trade.

In the Daily chart above we see a standard pullback to the 50% Fibonacci level just above $44.00 per share.

We’re also seeing four (potentially) bullish reversal candles develop AT this critical price pivot.

IF buyers indeed step in and bounce price higher from support, THEN we easily could see a short-term rally take price toward the underside of the falling 50 EMA at $47.00 per share.

Of course, IF buyers fail and sellers work their magic, THEN we could expect share prices to continue their descent toward $42.00 per share (which would be the alternate short-term thesis at the moment).

Let’s step inside the intraday chart to note the build-up of positive divergences and how to frame a trade:

Keeping the higher frame targets (such as the $44.30 level) in mind, note the build-up of positive momentum divergences into today’s session.

From there, we’re seeing at least an initial rally higher toward the underside of the falling trendline at $45.50.

Here’s the plan – carefully monitor the additional ascent toward the trendline and then consider buying a potential breakout beyond the $45.50 level to play toward $47.00 per share.

It’s a short-term trade, sure, but it will be interesting to see what happens next with this stock that’s happy to see a competitor take negative press/headlines for once.

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Corey Rosenbloom, CMT

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