Delta Reports Good Metrics and Raises Guidance 20%

Delta-Airlines

Delta Raises Guidance 20% Due to Tax-Reform

The stock is higher by more than 3.80% as we go to print. With that in mind, any profit taking at the open by nervous day traders would be viewed as an opportunity for a new entry.

DAL-01-11-2018

With Delta breaking out to fresh highs, it’s important not to chase it. More than likely price action will dip soon after the open and then resume a path higher. We will take a new entry only if price dips.

The Trade of the Day setup is one alternative. Wait for a flag on the 5min, then a breakout. There is also a possibility of an ABCD pattern later in the trading session. Wait for that “B” pivot to set stops and “C” to confirm that we are set to move higher. If neither occurs, we will pass and wait for a sign of exhaustion in the coming days.

IV Rank was 52% as of Wednesday close. All of the other major airlines have much higher IV so we see this as a borderline opportunity for options players as well. Generally, we like to sell premium when IV Rank is above 50%, so this is a tough call. This is why we’d like to see a dip first before entering.

DAL IV Rank

If the trade doesn’t work, there will be another. Let price come to you.

Delta Raises Guidance – The Importance of this Phrase

The important thing to note is Delta’s guidance. The company specifically points to the change in tax-law, which we have been talking about since the president signed the law on December 22.

Do you think this is the only company that will use this phrase in this reporting period? If you do then read no further. If however, you think this is only the beginning, like we do, then start doing your homework, because there will be so many more opportunities to come.

Japan announced this morning that they intend to lower their tax rate as well.

Get ready. The markets are about to boom again.

Happy Trading,

Vinny

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Vinny Gambini

Trade Fundamentals w/ Technical Analysis - CANSLIM method using high probability setups and Ichimoku Trend Analysis. Architect, Family Man and Father of three.