Why these once-scorned stocks are flying high again

Airlines are taking off—and it's not just on the runway.

Passenger airline stocks are up nicely over the last several days as the price of oil falls to seven-month lows. United Continental, Delta, American, Southwest and JetBlue are all up 6 percent or more in the last five trading sessions.

What's more, the Bureau of Transportation Statistics recently reported that 65.8 million passengers flew on U.S. carriers in May, making it the best May in six years.

So are airlines—which for years were said to make millionaires out of billionaires—a safe bet?

Ari Wald, head of technical analysis at Oppenheimer & Co., likes the airline industry as a whole. "This is a big secular reversal," he said. "We're still in the middle innings. And after a decade of losses where investors didn't want to touch this area, I still think there is a lot of upside opportunity."

One particular airline stock Wald likes is Delta, which is up more than 44 percent this year alone.

Wald's chart shows the stock forming a bullish double bottom with support at the $35 level. "What I like about it even more is that this double bottom is occurring above a rising 200-day moving average," he said. "All signs point to healthy consolidation. It has been on our buy list since late June. We're still a buyer. We think it's going higher."

Gina Sanchez, founder of Chantico Global, is also bullish on the industry. "Airlines have definitely been benefiting from these low oil prices," she said. "And more fuel-efficient aircraft have been also putting free cash flow out across the industry."

Sanchez, a CNBC contributor, said Delta in particular is updating its fleet this year and next with higher capacity and more fuel-efficient planes. The airline is also being helped by growing pretax margins, which Sanchez believes will be between 15 percent and 17 percent this quarter. She sees that helping Delta reach its free cash flow year-end guidance of $3 billion.

"And on top of that, it's still cheap relative to the S&P," Sanchez said, noting the stock trades at 12 times next year's earnings compared with the S&P 500's multiple of more than 17 times earnings.

"This is an interesting place to look," adds Sanchez. "Arrows are pointing up."

To see the full discussion on Delta, with Wald on the technicals and Sanchez on the fundamentals, watch the above video.

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