Key Takeaways
- Airlines stocks took off on Thursday, boosted by Delta reporting better-than-expected earnings and reinstating its full-year guidance.
- Delta shares have broken out from a symmetrical triangle. Key overhead areas on the chart to watch sit at $59 and $70, while an important support level lies at $50.
- United’s stock oscillated within an ascending triangle before breaking out above the pattern and the 200-day moving average on Thursday. Crucial overhead areas sit at $104 and $116, while retracements may find support around $83.
- American Airlines shares have broken out from a key horizontal line that stretches back to last September, which also marks the neckline of a double bottom pattern. Notable overhead areas to watch sit at $15 and $17.50, while the $12 level may provide support.
Airlines stocks took off on Thursday, boosted by Delta Air Lines (DAL) reporting better-than-expected earnings and reinstating its full-year guidance amid stabilizing bookings.
Delta shares soared 12% on the results, while United Airlines (UAL) climbed 14% to lead S&P 500 advancers and American Airlines (AAL) surged 13%.
Airline stocks had faced headwinds in the first half of the year due to soft travel spending as President Donald Trump’s trade policies dented consumer and business confidence, prompting carriers to lower their outlooks, or in the case of Delta, remove it. Delta CEO Ed Bastian said Thursday that the decision to restore full-year guidance reflected “our confidence in the business.”
Below, we take a closer look at the charts of Delta, United, and American to analyze recent trends and identify key support and resistance levels that investors will likely be watching.
Delta Levels To Watch
Delta shares staged a decisive breakout from a multi-month symmetrical triangle on Thursday, closing above the closely watched 200-day moving average (MA) in the process. Importantly, the jump occurred on heavy trading volume, indicating conviction from larger market participants.
Investors should watch overhead areas on Delta’s chart around $59 and $70, while also monitoring a key support level near $50. Interestingly, a measured move price target, which calculates the distance of the symmetrical triangle and adds that amount to the pattern’s top trendline, also projects an upside target just above $70.
United Airlines Levels to Watch
United shares oscillated within an ascending triangle before breaking out above the pattern’s top trendline and 200-day MA on Thursday, potentially setting the stage for follow-through buying. It’s worth pointing out the move was backed by the highest volume since mid-April and coincided with the relative strength index crossing into overbought territory, indicating bullish momentum, but also increasing the chances of near-term profit-taking.
Further buying could see United shares test important overhead areas near $104 and $116, while retracements may find support near the ascending triangle’s top trendline at $83, which may flip from prior resistance into future support.
American Airlines Levels to Watch
American Airlines shares broke out from a horizontal line that stretches back to last September, which also marks the neckline of a double bottom pattern, a chart formation that signals a bullish trend reversal. Thursday’s buying registered the highest trading volume since late September last year, while the relative strength index joined other airline stocks by ascending into overbought levels.
A close above the 200-day MA could fuel a rally toward major overhead areas on American’s chart around $15 and $17.50. Conversely, a retest of the initial breakout area would likely attract support near the key horizontal line discussed above at $12.
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As of the date this article was written, the author does not own any of the above securities.