Major stock indices are close to setting new records. The S&P index hit a high of 6408.05 on July 31 and is currently at 6422.93, up 49.47 points (0.78%). The NASDAQ index reached 21523.43 on August 11 and is now at 21553.10, topping the earlier intraday high of 21549.73 from yesterday.

Airlines Perform Well

Airlines are having a good day, fueled by Delta’s strong earnings. Delta reported earnings per share of $2.10, which exceeded the expected $2.06. Revenue also rose to $15.5 billion, beating expectations of $15.46 billion. As a result, Delta’s shares jumped 9.09% to $58.35, close to its previous high of $58.33. The key trading range between $56.52 and $58.33 suggests that breaking above could strengthen its upward trend. Other airlines are benefiting too: American Airlines is up 9.72%, United Airlines increased by 8.87%, and Southwest Airlines rose by 4.3%. Apple’s shares recovered after a prior decline. They are trading at $230, and increased by $2.75, or 1.2%, reaching a high of $230.59 today. Following a dip and a positive earnings report earlier this month, Apple’s price has surged by 14.10%. Although it’s down 8.35% for the year and closed 2024 at $250.42, it is still approaching its all-time high of $260.10. With the S&P 500 and NASDAQ nearing records, the outlook remains positive for the next few weeks. This could be a good time to consider call options or bull call spreads on broad market ETFs to capitalize on this momentum. The market has improved significantly since the volatility caused by rate hikes in 2023, showing strong investor confidence.

Delta’s Positive Influence

Delta’s impressive earnings represent a positive signal for the airline industry, making call options on DAL, AAL, and UAL appealing. We are paying close attention to Delta at the $58.33 resistance level, as a breakout here could lead to a significant upward movement. This strength continues to build on the post-pandemic recovery, with global air traffic surpassing 2019 levels according to IATA reports from 2024. For Apple, its recovery this month reflects renewed interest after struggling during the AI-driven rally late last year and early this year. There’s an opportunity to use call options to join this rally, aiming for late 2024 highs around the $250 mark. However, we should monitor for resistance as the price approaches this important level. Despite this optimism, it’s crucial to safeguard our gains, especially with indices at record levels. Buying out-of-the-money put options on the SPX or call options on the VIX can serve as affordable insurance against sudden market shifts. The market hasn’t faced a significant correction over 10% since a brief downturn in spring 2024, so exercising caution is advisable. Create your live VT Markets account and start trading now.

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