Is Delta Waiting for a Break Out?

Published on Tuesday, 26 June 2012 08:00 Written by TradersHuddle Wire

New York, June 26th (TradersHuddle.com) - Delta Air Lines, Inc. (NYSE:DAL) ended the trading session at $10.52, near its 50 day moving average set at $10.82. Delta's price action placed the stock below this important level, which makes it difficult to be bought, as the stock will certainly face resistance as it approaches its 50 day moving average.

Delta Air Lines, Inc. (NYSE:DAL) provides scheduled air transportation for passengers, freight, and mail over a network of routes throughout the United States and internationally. The company has major hubs in Atlanta, Cincinnatti, Detroit, Salt Lake City, New Jork, Tokyo and Amsterdam.

The latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $9.89 and resistance at $11.33. These levels will be closely monitored, as they provide great insight into the latest price dynamics.

If traders want to establish a position in Delta, given the resistance expected as the stock approaches its 50 day moving average, a trade might materialize as the stock manages to break this important technical level. After the breakout, the 50 day moving average could be used as support going forward. However, until the break materializes, buying the stock is basically a gamble with 50-50 chance.