DAL finds support at 20-day moving average
Delta Air Lines Inc. (DAL) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
DAL ended the week 18.24% higher at 22.69 after losing $0.47 (-2.03%) today on low volume, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DAL as at May 22, 2020):
Friday's trading range has been $1.17 (5.03%), that's below the last trading month's daily average range of $1.51. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DAL. Prices continued to consolidate within a tight trading range between 22.14 and 23.68 where it has been caught now for the last three trading days.
In spite of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle.
After trading as low as 22.23 during the day, Delta Air found support at the 20-day moving average at 22.34. Prices broke below the key technical support level at 22.92 (now R1), which is likely to act as resistance going forward. The last time this happened on May 11th, DAL lost -4.45% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 23.68 where further buy stops could get activated. As prices are trading close to May's high at 25.40, upside momentum might speed up should the share mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Delta Air. Out of 94 times, DAL closed higher 62.77% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.32% with an average market move of 1.72%.