Delta Air Lines (DAL) has soared higher the past five to six months, but prices are just now flirting with 2015 highs. Prices can move higher even when considered overbought, as DAL is, but a correction could be in the flight plans.
In this daily chart of DAL, above, we can see prices are above the rising 50-day and 200-day moving averages. A bullish golden cross comes in late November well off the June lows. The On-Balance-Volume (OBV) line has moved up to confirm the price action, but the momentum study shows a bearish divergence. As prices made higher highs in November and December, the momentum indicator made a lower high. This slowing of the advance is a signal to bulls to raise their sell-stops and maybe even to consider taking money off the table.
In this three-year weekly chart of DAL, above, we can see prices are back up to their 2015 zenith. The slope of the 40-week moving average line is just turning up. The weekly OBV line only moved up in the past two months. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line or bullish.
Bottom line: DAL could break out to new highs but the current setup of the indicators suggests to me that this flight could be delayed. A correction down into the $48 to $46 area may unfold in the next few weeks.
