During late spring and into ‘Brexit’ we saw many transports take walk on the wild side, dipping severely and approaching bearish territory. Higher oil prices were of no help and a cool economy made for a difficult forecast of travel trends. Though we must admit this group is more fit and ready to respond to negative shocks than in the past, there is still an economic sensitivity to the airlines. They are a good gauge of health/sickness in the economy.
Delta Airlines is looking strong, and the chart is just breaking out on good turnover. A series of higher highs, higher lows since the Brexit low is a bullish condition. The stock is overbought and the relative strength is impressive, a sharp slope upward. The gap from July has now been filled, the 200 ma is the next resistance at 42.44, followed by the May highs around 44 or so. There is still good upside to be had, and with crude higher this group outperformed on Monday – a good sign institutional buyers are stepping up to the plate.
