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News

Kroger shares fall despite Q1 sales beat

News

Brent crude falls below $80 on US-Iran peace deal

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JPY gains versus USD on strong trade data

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US dollar gains ahead of central bank meetings

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Gold surges after US-Iran peace deal

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Dow jumps 900+ points on Iran deal prospects

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Asset Watch

Is Delta Air Lines a first-class ticket?

Thursday, March 9, 2023

With Fed Chairman Jerome Powell pouring cold water on the recent rally, the S&P 500 confronted a sea of red on Mar. 7. He said:
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
In contrast, Delta Air Lines was a noticeable outperformer, and Evercore ISI upgraded the stock on Mar. 7. The team wrote:
“Demand tone remains upbeat (consistent with our early Feb conference), and we continue to expect positive updates next week.”
Delta Airlines Stock Chart Trading View

So, with relative strength present since its July and October lows, could Delta Air Lines be a solid momentum play in the weeks ahead?

 

Back in 2020-2021, the 20-week moving average provided continuous support. Delta Air Lines has sunk below its 20-week MA on six occasions since late October but has managed to close above the key level each time. As a result, the bulls have been quick to buy the dip, and until that changes, ‘the trend is your friend.’

 

The only caveat is the stock is 7.9% above its 20-week MA, so it may be prudent to wait for a pullback. But will the next bout of weakness be a great buying opportunity, or will recession fears change the narrative over the medium term?


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