Delta Airline Q3 earning Report

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The Pain is not over, but the Hopes are Alive.

By: Ahura Chalki

Earning reports of third-quarter going to start. From this week we going to have companies report for the third quarter, one of the companies, which investors will be looking for is Delta airline, which is planning to publish its earnings report on October 8, . The upcoming earnings date is derived from an algorithm based o Thursday and it is going to be one of its historical reports as the pains of Pandemic not just over, even going to punish the airline companies, more than ever.

“According to Zacks Investment Research, based on 13 analysts’ forecasts, the consensus EPS forecast for the quarter is $-3.05. The reported EPS for the same quarter last year was $2.32.” (1)

The all-time high Delta Air Lines stock closing price was 63.16 on July 16, 2019, which is 97.90% above the current price ($32.01) and the 2020 all-time high was $62.50, seen on January 17. After the pandemic, the stock price tested $17.38. Last time this price was seen back in Jun 2013, but in its clear uptrend and not in falling mode.

Back in May, after the first US stimulate package for the negative effect of COVID-19, which “the Trump administration has reached an agreement in principle with major airlines over the terms of a $25 billion bailout to prop up an industry hobbled by the coronavirus pandemic.” (2), in recovery stock could regain less than 50% of its losses to test $37.41, however, with lower than expected recovery in the economy and continuing the travel bans, generally, airlines could not keep their full employees

Delta, as the world’s second-biggest airline, was not able to fire people until October first, after receiving help from the United States government’s CARES Act, which is expired Sep. 30. And it was good enough reason to help the share price as well to be a bit stable and raise almost 21% in the highest price of the third quarter, however, by getting closed the CARES Act deadline at the end of September, again price lost the ground to close the quarter just with less than 5% gain.

For Airline companies at the moment, losing the estimates and being in the negative area for earning, is not surprising, for now, the main stimuli which can help the company to regain the lost, first of all is the next stimulate package, which is going to be approved in next days by parliament and the US government, however, advances in vaccine development and border opening is the main hope for Delta investors at the moment.

Technical Overview

As we can see in the weekly chart, the current price moves above 20 DMA and 23.6% of the Fibonacci level, which respectively sits on $30.50 and $28 and playing as a first and second support level.

In the Daily chart, after falling under the OBV trend line, after recovering above $31, again could change the trend to be traded above the OBV trend line. Further in the uptrend, 38.2% of the Fibonacci level, which is sitting on $34.60 is the first resistance, however, bulls need to pass the May high at $37.35 firstly and close the daily candle above 50% of the Fibo level, which sits on $39.90, to get the trend under control.

(1) https://www.nasdaq.com/market-activity/stocks/dal/earnings

(2)https://www.nytimes.com/2020/04/14/business/coronavirus-airlines-bailout-treasury-department.html


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