Delta Trades Higher Following American Air Lines Q1 Print: The Bull, Bear Case

Delta Air lines, Inc DAL was moving higher on Thursday, in tandem with the general market, which saw the SPDR S&P 500 SPY open in the green after Meta Platforms printed better-than-expected first-quarter earnings.

Delta's move higher also comes after American Airlines Group Inc AAL earnings printed its first-quarter earnings on Thursday. American Airlines reported EPS of 5 cents, which was in line with analyst estimates, and revenues of $12.189 billion, which missed the $12.2-billion consensus estimate.

The higher open on Delta had the stock trading within an inside bar pattern on the daily chart. An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar, and each is called an "inside bar."

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

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The Delta Air lines Chart: Delta’s inside bar leans slightly bearish because the stock was trading lower before forming the pattern, but traders and investors can watch for the stock to break up or down from Wednesday’s mother bar to determine future direction. For confirmation the pattern has been recognized, the break will need to come on higher-than-average volume.

Delta could also be forming a bearish head-and-shoulders pattern, with the left shoulder formed between March 28 and April 13, the head formed between April 14 and Wednesday. If Delta breaks up from the inside bar and trades higher before retracing to the neckline over the coming days, the pattern will be formed, and the stock could break down further.

Delta is trading under the 200-day simple moving average, with the 50-day SMA trending above the 200-day. Bullish traders want to see Delta regain the 200-day, otherwise a death cross could occur on the stock’s chart.

Delta has resistance above at $34 and $37.31 and support below at $32.74 and $30.73.

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