DAL | Options Trade Idea Ahead of Earnings

DAL Options Play

Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and internationally. The company operates through two segments, Airline and Refinery. DAL reports earnings on July 13th, 2017 let us look at a strategy to capitalize on the earnings report.

image of DAL stocks trading chart

DAL Technicals

Technically, the chart looks phenomenal! From the Dynamic Trend Indicator (available on Alphashark.com or email Lance@alphashark.com for link) DAL meets all the criteria for a long or if already long stay with the trend. The multiple time frame analysis confirms positive momentum with price above the wave. Overhead resistance is at 54.74 which DAL is currently on the path to new highs. Usually when a stock is approaching new highs weak hands will try to short it leading to a breakout on volume to new highs as the shorts will have to cover. Remember, we want to be strong hands as smart traders and not fight the trend!

As of July 7th, 2017, DAL is trading at 54.60 with the expected move for July 8th option expiration is $2.20I can find the expected move by adding the ATM straddle for the week of expiration.  Therefore, if I add 54.60 + 2.20 = 56.20 as an upside target for an options play expiring on July 8th expiration.

DAL Options Trade idea:

I am bullish on DAL using the Dynamic Trend Indicator with a price target of 56.20 Therefore, I can develop a trade that will take advantage of my expected move with limited capital requirements. The July 8th 55.5 calls are trading at .65 debit, I am looking to buy these calls outright. My max loss on the trade is $65 per contract with my max gain being unlimited! The trade starts to get into the green when DAL trades at or above 56.15

Written by: Lance Ippolito https://twitter.com/LanceIppolito

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