With today’s gap up, we recommend taking profits in Becton Dickinson (BDX) because it has reached our targeted resistance level.
We are tightening our stop-loss level for the iShares 20+ Year Treasury Bond ETF (TLT) to $106 from $103.
Bearish reversals are widespread in the overextended travel & leisure group. A new short idea is Delta Airlines (DAL):
DAL has seen a notable loss of momentum after becoming extended near resistance from the August high. An intermediate-term overbought “sell” signal per the weekly stochastics supports a pullback.
Today’s weakness in DAL is significant in that it has resulted in a decisive breakdown in the stock’s ratio versus S&P 500 Index (SPX). The breakdown suggests DAL should see a period of underperformance.
A targeted level can be defined by support from the July low ($28.10). A stop-loss level would be triggered with two consecutive daily closes above the 20-day moving average, which is currently near $34.60.
Delta Airlines (DAL, $33.27)
Target: $28.10
Stop-Loss: $34.60