During Friday's Mad Money program, Jim Cramer mentioned that on this Thursday we'll hear about earnings from Delta Air Lines (DAL) , which has been in great shape, but Cramer worried that competition may be crimping earnings soon.
In this daily bar chart of DAL, below, we can see that prices have weakened significantly in the past two to three months. Early this month prices broke to the downside breaking the uptrend from January. Prices closed below the relatively flat 200-day moving average line testing the early June price low.
The On-Balance-Volume (OBV) line has rolled over and turned down telling us that sellers of DAL have become more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator is now below the zero line in sell territory.
In this weekly bar chart of DAL, below, we can see that prices are now below the 40-week moving average line.
The weekly OBV line looks to have topped the past three months and the MACD oscillator has turned down to a take profits sell signal.
In this Point and Figure chart of DAL, below, we can see a potential downside price target of $45 being projected.
Bottom line strategy: We find a number of bearish clues on our charts, above, so we want to recommend a defensive strategy on DAL. Weakness below $51 is likely to precipitate further declines to the $45 area in the weeks and months ahead. Try to avoid the long lines at the TSA check point by coming early as well as the long side of DAL.
