Delta: The Stock's Must-Know Levels After Earnings

Delta Air Lines is set to report earnings on Tuesday. Here are the stock's must-know levels to keep an eye on once the airline reports.
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Delta Air Lines  (DAL) - Get Report is set to report earnings on Tuesday. Coming into the event, shares have been quite mixed.

Airlines, cruise lines, casinos and other travel-oriented stocks were obliterated in March. Even once the stocks had stopped going down, many did not see much upside. They traded sideways as the market came roaring back in April.

However, American Airlines  (AAL) - Get Report issued some positive news regarding bookings, which helped to launch the entire industry into a monumental rally.

Despite breaking to new lows in May, Delta stock reversed hard off the $17.50 level and surged toward $37.50. The stock rallied over 100% in less than a month.

But just as American, United Airlines  (UAL) - Get Report, Delta and others enjoyed a powerful rally, the stocks have also fallen into a morale-crushing pullback. 

Let’s look at the charts ahead of earnings.

Trading Delta Stock

Daily chart of Delta stock.

Daily chart of Delta stock.

It’s possible that Delta will set the tone for the rest of its industry when it reports.

Honestly, it's good to see the stock pull back ahead of earnings. While this correction did not necessarily need to begin a month ago, it helped to drive down expectations ahead of what’s likely to be a poor result.

But the result isn’t what’s important, it’s the reaction that matters now.

As shares cling to the backside of prior downtrend resistance (blue line) and the 50-day moving average, bulls want to see Delta stock hold $25 after it reports earnings. That level comes into play just below last week’s low.

A close below that mark could send Delta into the low-$20s, where it found multi-month support from March through May, with the exception of that three-day breakdown that sent it to new lows.

On the upside, bulls would love to see shares clear $30. That would put it above the 23.6% retracement at $28.02, as well as the 20-day, 50-day and 100-day moving averages.

In that event, it will put the 38.2% retracement in play near $34.50, as well as the June high at $37.24. 

Delta stock has been a very volatile name lately and with good reason. While many consider it the best airline stock, it will continue to have some turbulence. Watch the levels after it reports and see which direction grabs momentum.