Bullish Trendline Could Aid Airline Stock After Earnings

Core Insights - Delta Air Lines (DAL) is set to release its fiscal third-quarter earnings report on October 9, with shares currently showing a 47.2% increase over the past six months despite a recent decline from early September highs [1] - The stock is approaching a significant support level at $56, and a historically bullish trendline may facilitate a rebound if quarterly results are favorable [1] Stock Performance and Trends - DAL's stock is currently within 3% of its 12-month trendline, having spent over 80% of the last 20 monthly closes above it [2] - Historical data indicates that similar signals have led to a 69% chance of the stock being higher one month later, with an average gain of 5.6% [2] - Over a three-month period, DAL has shown an average increase of 89%, suggesting potential to exceed $63 from its current position [2] Earnings Report Expectations - The stock has experienced declines after five of its last eight earnings reports but has seen significant gains following the last three, including a 23.4% increase the day after the April report [4] - Historically, DAL has averaged a 7.9% price movement in response to earnings reports over the past two years, with options traders anticipating a similar movement this time [4] Options Market Sentiment - While call options are still more prevalent than puts, short-term options traders are exhibiting increased bearish sentiment, which could lead to a potential stock price boost if this pessimism unwinds [5] - The Schaeffer's put/call open interest ratio (SOIR) is currently in the 71st percentile of the last 12 months, indicating a higher level of bearish sentiment [5] Volatility and Pricing - DAL's options are currently priced attractively, with a Schaeffer's Volatility Index (SVI) of 57%, placing it in the low 28th percentile of its annual range, suggesting low volatility expectations [6] - The Schaeffer's Volatility Scorecard (SVS) of 88 out of 100 indicates that DAL has historically outperformed volatility estimates over the past year [6]