Saturday, January 4, 2014

DAL Delta Air Lines Weekly Chart Upward-Sloping Channel Overbot Negative Divergence Price Extended

A television pundit is telling everyone to buy Delta with both hands. Instead, run from it. Oil is trailing lower which helps the air lines and transportation and shipping stocks, however, the run from 8 to 30 in one year's time, +275%, is long in the tooth. The upward-sloping channel is impressive but the top is now forming. The top 6 weeks ago occurs with the doji candlestick. Traders are drinking the Fed's Koolaid since no one sees any asset bubbles in markets. A 275% move in 12 months is not an asset bubble? These folks were obviously tutored by a different mentor than Keystone. The overbot conditions and negative divergence (red lines) say the top is at hand and 2014 will likely be a tough year for DAL.

DAL no doubt has momo on its side so a print inside the circle should occur. Note that price is almost at a matching price high and negative divergence is firmly in place; DAL is running out of gas, or jet fuel to be more correct. Watch the maroon lines in the right margin. Delta can be shorted from the circle but make sure the neggie d holds in place, which it should without any problem. Price is extended above the moving averages requiring a mean reversion.

It comes in handy for television cheer leaders, perhaps in collusion with the fund houses, to pump it so it can be dumped to Joe Retail, who shows up like a sap at all these tops to hold the bag. Exit and take profits if long and move on, or, short DAL from the circle. To paraphrase the young people, DAL is so 2013. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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