Delta Air Lines (DAL) has had a powerful run-up recently. The rally from September has a parabolic shape to it. The 50-day and 200-day moving averages are close to a bullish golden cross so we want to look to be a buyer.
Let's check our charts and indicators.
In this daily chart of DAL, below, we can see the strong price rise and also the big increase in the On-Balance-Volume (OBV) line from late June telling us that buyers have been aggressive for more than four months. The daily Moving Average Convergence Divergence (MACD) oscillator has been above the zero line for an outright buy signal since mid-September.
This weekly chart of DAL, below, going back three years, shows that prices have been stuck in a wide trading range since mid-2014 -- a long time to be stuck on the ground. Prices have rallied above the now rising 40-week moving average line. The weekly OBV line just broke out to a new high for the move up, perhaps foreshadowing a price breakout to new highs.
The MACD oscillator is almost back above the zero line for an outright go long signal.
Bottom line: DAL looks like it is capable of an upside breakout but after a steep advance we want to take our time joining the fray. Look for DAL to have a reaction into the $46-$44 area for a place to go long. Put in a sell stop and look to add to your position on a close above $50. Keep your seat belt low and tight.