Well-defined trend line helping move Delta Air Lines higher
Over the last eight months a trend channel has formed on Delta Air Lines (NYSE: DAL). The channel is very well defined and the lower rail connects the lows for 2019 while the parallel upper rail connects the highs from April and July. The stock is hovering just above the lower rail at this time and it looks like it is ready to rally again.
The daily stochastic readings have been hovering in the bottom half of their range since the beginning of August. The indicators did make a bullish crossover on August 28 and that could be a positive sign for the stock. We see that the indicators were also in the lower half of the range for most of May also before a bullish crossover came just before the stock rallied sharply.
It is also worth noting that the 10-day RSI was just above the 30 level and the lowest it had been since the end of May before the stock turned higher.
In addition to the bullish crossover from the stochastic readings, the Tickeron Trend Prediction Engine generated a bullish signal for Delta on August 27. The signal showed a confidence level of 70% and calls for a gain of at least 4% within the next month. Past predictions on Delta have successful 81% of the time.
From the Tickeron Technical Analysis Overview we see that the lower Bollinger Band was broken and a price increase is expected as the ticker heads toward the middle band. This indicates a buy or call consideration for traders. In 27 of 39 cases where Delta’s price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 69%.
On the fundamental side, Delta saw a nice jump in earnings growth for the second quarter and earnings are expected see a nice jump for the year. The EPS jumped by 32% in the second quarter of 2019 compared to the second quarter of 2018. Analysts expect earnings to grow by 27% for 2019 as a whole.
Revenue has not been growing as fast as earnings, but it has been growing never the less. In the last three years sales have increased by an average of 5% per year and they jumped by 6% in the second quarter.
The Tickeron SMR rating for this company is 51, indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
The return on equity for Delta is at 29.7% and the profit margin is at 11.4%.
The Tickeron Valuation Rating of 38 indicates that the company is fair valued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. Delta’s current P/E ratio is only 8.38.
The Tickeron Profit vs. Risk Rating for Delta is 39, indicating well-balanced risk and returns. The average Profit vs. Risk Rating for the industry is 77, placing this stock slightly better than average.
Looking at the sentiment toward Delta we see average readings. There are 20 analysts following the stock with 14 “buy” ratings and six “hold” ratings. This puts the buy percentage at 70% and right in the middle of the average range between 65% and 70%.
The put/call ratio is at 3.7 currently and that is slightly skewed toward the pessimistic side. The short interest did jump by almost four million shares in the first half of August which indicates increasing pessimism.
With the technical picture and the fundamentals looking good, I don’t see why Delta won’t move higher in the coming month.
Momentum Indicator for DAL turns negative, indicating new downward trend
DAL saw its Momentum Indicator move below the 0 level on December 09, 2024. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 81 similar instances where the indicator turned negative. In of the 81 cases, the stock moved further down in the following days. The odds of a decline are at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for DAL moved out of overbought territory on November 18, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 34 similar instances where the indicator moved out of overbought territory. In of the 34 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Moving Average Convergence Divergence Histogram (MACD) for DAL turned negative on November 20, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 44 similar instances when the indicator turned negative. In of the 44 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where DAL declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
DAL broke above its upper Bollinger Band on December 05, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where DAL advanced for three days, in of 301 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 278 cases where DAL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. DAL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.915) is normal, around the industry mean (3.832). P/E Ratio (8.548) is within average values for comparable stocks, (41.336). DAL's Projected Growth (PEG Ratio) (0.000) is slightly lower than the industry average of (0.865). DAL has a moderately low Dividend Yield (0.008) as compared to the industry average of (0.038). P/S Ratio (0.660) is also within normal values, averaging (1.450).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. DAL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 93, placing this stock better than average.
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General Information
a provider of scheduled air transportation for passengers, freight, and mail services
Industry Airlines