The price chart of Delta Air Lines Inc. (DAL) shows a number of up-and-down swings over the past year. Traders and investors have needed to keep their seat belts on -- low and tight -- during these quick moves.
Is there a better flight plan ahead in the charts with earnings due out this week? Let's take off our belts and shoes and look at the charts of this stock discussed by Jim Cramer on Mad Money Friday night.
In the daily bar chart of DAL, below, one can easily see the up-and-down swings mentioned above. DAL crosses above and below the 50-day and 200-day moving averages many times over the past 12 months. Traders needed to be very nimble. The decline in December was weaker than other declines and broke the October and July lows.
The daily On-Balance-Volume (OBV) line shows a rise to a late September high and then a decline into the new year. The 12-day price momentum study in the lower panel shows a slowing of the decline in late December and early January. This shift in momentum could carry over this week and DAL may see a rebound or "reflex" rally in the days ahead.
In the weekly bar chart of DAL, below, we can see that prices did move up from a mid-2016 low but it has not been smooth flying. Every rally was heavily retraced. Prices have crossed the mostly rising 40-week moving average line many times in the past three years.
The weekly OBV line does not show a sustained advance but rather a sideways up-and-down pattern. Buyers seem to come and go. In the lower panel is the weekly Moving Average Convergence Divergence (MACD) oscillator, which just moved below the zero line for an outright sell signal on this longer time frame.
In this Point and Figure chart of DAL, below, we just look at price changes for the stock and ignore time and volume. This chart shows a number of rally failures and a downside price target of $40.03.
A rally to $51.53 is needed to really improve the picture.
Bottom-line strategy: DAL has been a hard stock to trade or position. Traders should wait for a higher low or more defined upside reversal pattern before looking to trade DAL from the long side.
