Delta Air Lines Inc. (DAL) 12/22/09 PriceWatch Alert Shows Bullish Technicals

Posted: Tuesday, December 22, 2009 8:15 AM EDT
By: Market Intelligence Center Staff

Delta Air Lines Inc. (NYSE: DAL) closed yesterday at $11.39. So far the stock has hit a 52-week low of $3.51 and 52-week high of $12.65. Delta Air Lines stock has been showing support around 10.96 and resistance in the 11.88 range. Technical indicators for the stock are Bullish and S&P gives DAL a positive 4 STAR (out of 5) buy rating. DAL appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 9 covered call for a net debit in the $8.09 area. That is also the break even stock price for this trade. This covered call has a 179 day duration, provides 28.97% downside protection and an 11.25% assigned return rate for a 22.94% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the DAL Jan '11 2.50 Call and selling the Jun '10 9 call for a $6.00 debit. The trade has a 179 day life and would provide 25.37% downside protection and an 8.33% assigned return rate for a 17.00% annualized return rate (for comparison purposes only). Delta Air Lines does not pay dividends at this time. [ATU-Seven Summits Research]