Surging Oil Prices Sink Delta Air Lines Stock

DAL could snap its five-day win streak today

Deputy Editor
Sep 16, 2019 at 9:45 AM
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This weekend's drone strike at oil facilities in Saudi Arabia has done a number on the travel sector this morning, with investors afraid that a spike in oil prices will lead to higher costs for airlines. The shares of Delta Air Lines, Inc. (NYSE:DAL), in particular, are looking to snap their five-day win streak -- their longest since mid-July. 

After hitting an all-time high of $63.43 on July 24, the equity cooled off for most of August, before rallying hard off the $56-$57 region, which is currently home to familiar support at its 120-day moving average. Just last Friday, the stock hit a one-month peak of $60.58. Today, however, DAL could be testing the 120-day once more, down 3.2% to trade at $58.09. 

Analysts have been quite bullish toward DAL, with nine of the 14 in coverage calling it a "buy" or better. Plus, the 12-month consensus target price of $69.78 represents an untouched level for the stock. 

This sentiment has been echoed in the options pits, too. During the past 10 days, 3.29 calls have been bought for every put on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio is in the 88th percentile of its annual range, too, suggesting a much bigger appetite for bullish bets relative to bearish of late. 

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