By Doug Busch
A relative-value opportunity may be emerging within the airline sector, favoring LATAM Airlines Group over Delta Air Lines. While Delta has benefited from strong premium travel demand and a well-executed post-pandemic recovery, much of that strength now appears reflected in its stock price. By contrast, LATAM has expanding regional demand, and greater leverage to international and emerging-market travel trends.
Without question, the group has been rocked by earlier recession fears and the Middle East conflict, which caused energy prices to skyrocket. Crude has started to settle back down. Some airlines have performed better than others, and Delta was one of them. This is likely because Delta is the only airline to own its own refinery, which it purchased from Phillips 66 in 2012. This helped reduce its jet fuel expenses and hedge against oil volatility.
LATAM Airlines Group ADR, the largest airline group in Latin America, is up 86% over the last year and is higher by 3% year to date. The stock is down 21% from its most recent 52-week high, but is on a five-week winning streak, immediately following a six-week losing streak. The setup looks similar to the five week losing streak last September-October before the price went on a robust run upward.
Looking at the stock's daily chart, it has given back about half of the December-January uptrend on the ratio chart against the U.S. Jets Global ETF, but it is rounding out the right side of a cup base. It is now back above its 50-day and 200-day simple moving averages and its 21-day exponential moving average, and last Friday's 5% gap completed a bullish island reversal. A cup base is taking shape, which began with a bearish evening star completed on Feb. 4 at the round $70 level. One can enter at $54.50 and look for the stock to travel toward $95 over the next one year period, which would be a 70% gain from current prices. Remain bullish above $51.
LATAM Airlines Group ADR was trading around $55 Monday.
Delta Air Lines, a global airline, has gained 82% over the last year and risen 3% year to date. Give the name credit for being just 6% below its 52-week high, as the JETS ETF is 21% from its annual peak. Last week Delta added 6%, slightly underperforming the JETS, which jumped 8%.
Looking at the stock's daily chart, it is possible that we are seeing a triple top at the $75 level over the last two months. It previously broke above two double bottom bases last July and November. A current cup base is in focus, but this one has a V shape to it, which makes it more failure prone. Additionally, notice that the February 11, April 4, and April 17 sessions all recorded long bearish filled-in candlesticks. These types of candles feature a strong open but a very weak close, indicating powerful selling pressure that often signals trend reversals. I believe one should remain bearish on this stock and look to short near $73.50 and cover at $65. If the stock closes above $76, the negative narrative is no longer valid.
Delta Air Lines was trading around $72 Monday.
For now, the setup favors LATAM as the more compelling opportunity within the airline space.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
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(END) Dow Jones Newswires
April 20, 2026 13:18 ET (17:18 GMT)
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