DAL: Buy on good earnings

2017年4月12日

FAILED BREAKOUT OF HISTORICAL TOP MEETS MOVING-AVERAGE SUPPORT
DAL is currently trading 15% below historical high, after it repeatedly failed to break out since late last year, on what looks like a quadruple-top at the historical high. However, the corrective move seems to have met a decent support at the MA100, $44 level. I would venture to say that the stock has found a temporary bottom and that the short-term picture looks positive.

SUPPORTIVE FUNDAMENTALS
In addition to the improving technical picture, the news flow from the industry has been supportive, as airlines have been publishing ever improving yield/occupancy numbers. As a confirmation, the DAL earnings have just come out and the stock is indicated up some 3% pre-market on the news.

COMPELLING RISK-REWARD
Strategy: Plain vanilla BUY at the market
Target: 50/share then 52/share
Stop-loss: 44/share
Minimum R/R: 1.72x

Alternatively sell a put at the stop-loss ($44) to finance a slightly OTM call.

2017年4月18日

註釋

DAL Broke our stop-loss intraday but closed above it and rebounded off it. The MA200 should prove difficult to break, hence holding to positions for now seems like the best thing to do, if your trade has not been stopped.

2017年6月2日

註釋

The stock is up 10% since we initiated this position 1.5 months ago. We are now in a gently ascending channel, and close to the resistance at 50.50/share. The technical picture is currently positive on most time frames, and the stock needs to clear its resistance in order to advance further. The next support levels are 48 / 47 / 45.50, all of which are above our entry price. Stay long ahead of earnings release in about one month. The stock could get additional fundamental support from the current benign macro environment (lower oil prices, global growth still picking up).

2017年6月5日

註釋

We saw a volume pickup at the close on the 1-min chart, as well as a volume pickup on Friday on the daily chart. This happened simultaneously to a breakout above the current resistance - Now turned support. Our next target becomes the historical high at 52.76, a mere 3% away. We set a stop-loss near the previously highlighted support, at $47.50. Current investors should increase their position size into the breakout, while new money could be deployed in half size.

2017年6月5日

註釋

This chart snapshot summarizes our latest comment.

2017年6月8日

註釋

Price and volume pickups yesterday confirm the breakout status of Delta Airlines. We are now less than 1% away from its next resistance at $52.76. At this rate, we might have to increase position size again as the stock continues its rally.

2017年6月9日

註釋

Yesterday the stock closed above the $52.76 resistance we highlighted repeatedly. This paves the way for further upside. Current owners should increase their position by 20% and advance the stop-loss to $50.

2017年7月10日

交易結束：達到停損點

At the close of yesterday (ref. $55.46), those who traded this name at inception of our idea on April 12 (ref. $45.29) would have made 22.5% - Some 90% annualized. Although there is still is good momentum on DAL, we would like to protect the hard earned gains by selling the position at the open and ahead of the earnings publication due in three days, and to replace it by a long ATM call strategy. Will detail the long call strategy in a separate post.

2017年7月10日

交易結束：目標達成

Error in the latest post above: Target reached with a hefty capital gain, not stop loss.