Delta Air Lines [Airlines; United States] rises in strong trading with rising open interest, continues strong weekly and monthly trend December 05, 2011

STOCKS

Delta Air Lines (DAL.N) increased 20.0c (or 2.4%) to close at US$8.61. Compared with the Dow Jones Industrials index, which rose 78.4 points (or 0.6%) on the day, this was a relative price change of 1.7%.

OPEN INTEREST TREND AND INTERPRETATION

Price Change % 1-day 1-month 1-year DAL 2.38% 3.73% -36.83% Airlines 0.17% -5.28% -32.35% DJIA 0.65% 0.96% 6.29%

Open interest hit a one-month high.

Same day trend: open interest climbed 5.5% from 531,051 to 560,476. Combined with the price rising 2.4% this suggests the market is strong.

Trailing one week trend: open interest rose for a second week. Open interest soared 18.3% from 473,595 a week ago while the stock soared 10.4% from US$7.43 a week ago. Combined with the rising price this also suggests the market is strong.

Trailing one month trend: open interest gained 4.0% from 538,773 a month ago while the stock gained 3.7% from US$8.35 a month ago. Combined with the rising price this also suggests the market is strong.

Open interest as % of issued capital: 56,047,600 shares, representing 6.6% of the issued capital.

[ranked 295 out of 1766 stocks in descending order]

Put:call ratio: open interest contracts on exchange traded options included 281,964 put contracts and 278,512 call contracts.

The put:call ratio was 1.0, up 6.1% for the day, down 13.8% in the past week and up 2.2% in the past month.

Top three traded call options [volume of contracts in brackets; 1 contract is 100 shares]

Exercise US$8.0; Expires Dec 17: 69.0c up 19.0% [1312]

Exercise US$9.0; Expires Jan 21: 41.0c up 10.8% [805]

Exercise US$9.0; Expires Dec 17: 13.0c up 30.0% [644]

Top three traded put options [volume of contracts in brackets; 1 contract is 100 shares]

Exercise US$5.0; Expires Jan 21: 7.0c down 12.5% [2108]

Exercise US$5.0; Expires Jan 19: 48.0c down 2.0% [782]

Exercise US$8.0; Expires Dec 17: 12.0c down 7.7% [732]

TECHNICAL ANALYSIS

Uptrend

Support: the support price is hovering at the US$7.08 level. Volume traded at the support price zone was 1.4 times average during the five occasions when the support price was breached. In the last month the lowest price was US$7.08 on Nov 21. The second lowest was US$7.08 on Nov 25, the third lowest was US$7.12 on Nov 23, the 4th at US$7.15 on Nov 17 and the 5th at US$7.18 on Nov 22.

Resistance: the stock is in a short-term spike being above its 50-day moving average price of US$8.053, but below its 200-day moving average price of US$8.906. Previous rallies have been met with firm resistance at US$8.72. Volume was 2.2 times average during the three occasions when the resistance price was breached in the last one month. In the last one month the highest was at US$8.72 on Dec 05, the second highest at US$8.65 on Dec 02. The third advance halted at US$8.62 on Dec 01.

Trailing month: in the last 21 trading sessions there has been a net rise of 3.11%; the stock has advanced 3 times and the biggest one day rise was 5% on Nov 29.

PRICE VOLUME DYNAMICS

Volatility: the stock traded between an intraday low of US$8.51 and one-month high of US$8.72, suggesting a trading opportunity between peaks and troughs. The average daily volatility of 4.3% places the stock in the 1st quartile in the market meaning it is highly volatile.

Volume: there were 14,564,177 shares worth US$125.4 million traded. The volume was 0.9 times average trading of 6,988,760 shares.

% Discount to high: the last price is at a discount of 37.7% to the 12-month high of US$13.82.

% Premium to low: the last price is at a premium of 34.3% to the 12-month low of US$6.41.

Volume weighted price (VWP): the price is at a premium of 9.3% to the 1-month volume weighted average price of US$7.876. Given that this premium has been under 9.3% seventy times and over 9.3% fifteen times in the last year, the downside:upside probability is estimated at 70:15 or 4.7:1.

Beta: The Beta of this stock is 1.03. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

Standard Deviation (SD): SD is a statistical measure of deviation from the mean. The SD of 3.1% gives it a percentile rank of 75 meaning that 75% of stocks in the global market are less volatile than this stock.

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PRICE PERFORMANCE RANK IN SECTORS

The stock is in 2 sectors.

The following index and sectors rose setting the trend for its rise of 2.4%:

Dow Jones Industrials index of 30 stocks traded today, which was up 78.4 points or 0.6% to 12,097.8;

The index of Top 5000 stocks by MCap, which was up 40.8 points or 0.5% to 8,308.8;

Airlines sector of 33 stocks traded today, which was up 10.0 points or 0.2% to 5,758.

Percentile Rank 1-day 1-month 6-months DAL 85 78 56 Airlines 45 30 33 DJIA 55 65 76

RELATIVE VALUATION INDICATORS [RVI] FUNDAMENTAL ANALYSIS

The stock meets the following value criteria set by Benjamin Graham:

-"An earnings-to-price yield of at least twice the triple-A bond"; the stock's earning yield of 8.1% is 3.99 times the triple-A bond yield of 2.0%.

Other Bullish Signals:

- Price/Sales of 0.23 versus sector average of 0.4 and market average of 1.0. We estimate the shares are trading at a current year Price/Sales of 0.2 and a forward year Price/Sales of 0.2.

- The company is cash rich with Cash to Market Capitalisation at 39.7%.

Bearish Signals:

- Price/Earnings of 12.3 versus sector average of 10.9 and market average of 13.6.

- Total Liabilities/ EBITDA of 12.7 is more than or equal to 5, this compares unfavourably with Joseph Piotroski benchmark of 5.

- Return on Assets of 1.4% versus sector average of 2.6% and market average of 1.8%.

- Return on Capital Employed of 5.1% versus sector average of 6.6% and market average of 11.4%.

The stock has a score of merely 3 out of 9 set by Joseph Piotroski [pass mark >=5 ]:

Positive net income; Positive operating cashflow; Good quality of earnings [operating cashflow exceeds net income].

RELATIVE VALUATION INDICATORS [RVI] TECHNICAL ANALYSIS

Bullish Signals:- The price soared 10.4% in the last week.

- This has been propped up by firm volume of 1.2 times average for the week.

- Compared with the Dow Jones Industrials index which rose 5.0% for the week and 1.0% for the month, this represented a relative price increase of 5.4% for the week and 2.8% for the month.

- The price to 50-day EMAP ratio is 1.1, a bullish indicator. In the past 50 days this ratio has exceeded 1.1 just thrice suggesting a resistance level.

- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) minus the 26-day EMA is positive suggesting a bullish signal.

Breakout:

- The stock traded at a one-month high of US$8.72 today.

- The bulls are maintaining control with price open, high, low and close exceeding yesterday's levels.

Bearish Signals:

- In the global market of top 5000 stocks by MCap, the stock has a 6-month relative strength of 56 which means it has outperformed 56% of its global peers.

- The price to 200-day MAP ratio is 0.97. In the past 200 days this ratio has been under 0.97 140 times suggesting further downside. The 50-day MAP of US$8.053 is lower than the 200-day MAP of US$8.906, a bearish indicator. The 200-day MAP has decreased to US$8.906. A decrease is another bearish indicator.

- the stock is overbought according to the Williams % R indicator of -6.7.

SHAREHOLER RETURNS

Trailing one week: the stock rose four times (80% of the time) and fell once (20% of the time). The volume was 1.2 times average trading of 34,943,800 shares. The value of US$1,000 invested a week ago is US$1,209 [vs USD1,051 for the Dow Jones Industrials index], for a capital gain of US$209 (or rise of 20.9%).

Trailing one month: the stock fell ten times (50% of the time), rose nine times (45% of the time) and was unchanged once (5% of the time). The volume was 0.8 times average trading of 153,752,720 shares. The value of US$1,000 invested a month ago is US$1,037 [vs USD1,011 for the Dow Jones Industrials index], for a capital gain of US$37 (or rise of 3.7%).

Trailing one year: the value of US$1,000 invested one year ago is US$632 [vs USD1,092 for the Dow Jones Industrials index], for a capital loss of US$368. The total return to shareholders for 1 year is -36.8%.

The present value of US$1000 invested at a previous date is shown below:

PV1000 1-week 1-month 1-year DAL Stock 1,209 1,037 632 Airlines USD1,051 USD947 USD683 DJIA USD1,051 USD1,011 USD1,092

FINANCIALS

Quarterly Report released on November 26, 2011; year-on-year comparisons with previous corresponding period:

In the quarter to September 30, 2011 total revenue was up 9.7% to US$9.8 billion; net profit growth 51.2% to US$549 million; EPS of 65.0c.

Annual Report for the year ended December 31, 2010 (year-on-year comparisons with previous corresponding period)-

EPS of 70.0 U.S. cents.

Favourable Changes: total liabilities to EBITDA down 64.1% to 12.7. While this compares unfavourably with the Joseph Piotroski benchmark of <5, the trend is favourable; although the Total Liabilities to Operating Cash Flow ratio of 14.9 also compares unfavourably with the Joseph Piotroski benchmark of <4, it had improved by 52.7% from the previous year.; total liabilities to total assets down 1.0% to 1.0; Sales to total assets up 15.6% to 0.7.

Unfavourable Changes: current ratio down 22.0% to 0.6.

Major Common Size Ratios: fixed assets to total assets up from 46.7% to 47.0%; other non-current assets to total assets up from 35.1% to 36.1%; intangibles to total assets up from 33.4% to 33.7%; total current assets to total assets down from 18.2% to 16.9%; cash to total assets down from 10.5% to 6.7%; EBITDA to Sales up from 4.4% to 10.5%; depreciation to sales down from 5.5% to 4.8%; interest expenses to sales down from 3.2% to 3.2%.

MARKET SHARE

Delta Air Lines vs Airlines sector [Airlines sector Total in Brackets]

Net Profit of US$593 million [5.3% of aggregate sector net profit of US$11.1 billion; down from 22.5% in the previous year.]

EBIT of US$1.6 billion [8.6% of aggregate sector EBIT of US$18.7 billion; up from -35.8% in the previous year.]

ISSUED CAPITAL

Based on 846,062,700 issued shares the market capitalisation is US$7.3 billion. It is the world's largest Airlines company by market capitalisation.

ACTIVITIES

It is the world's 3rd largest Airlines company by total revenue.

Delta Air Lines, Inc. (Delta) is an airline that provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company's global route network is centered around the hub system it operate at airports in Atlanta, Cincinnati, Detroit, Memphis, Minneapolis/St. Paul, New York-JFK, Salt Lake City, Amsterdam and Tokyo-Narita. Each of these hub operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub to domestic and international cities and to other hubs. Delta also has codeshare arrangements with Aeromexico, Air France, Alitalia, China Airlines, China Southern, CSA Czech Airlines, KLM Royal Dutch Airlines, Korean Air and Royal Air Maroc (and some affiliated carriers operating in conjunction with these airlines). On October 29, 2008, a subsidiary of Delta merged with Northwest Airlines Corporation (Northwest).

TOP MANAGEMENT

The chairman is Daniel A. Carp, the chief financial officer is Hank Halter and the chief executive officer is Richard H. Anderson.

REPORTED SELLING

Reported Selling: