Airline stocks have been grounded this summer, but one trader is looking to quadruple his money on a stock he says is about to take off.
Delta Air Lines has traded in a range since its shares fell sharply leading into August. But Andrew Keene of AlphaShark believes the technicals are showing a turnaround for the struggling carrier.
"I think the short-term bottom is in here, and I think we can make a move higher," he said Wednesday on CNBC's "Trading Nation."
The bottom Keene refers to sits at $36 on Delta's daily chart. Not only is the stock rising off of the $36 level once again, but Delta is also trading right around its 50-day moving average. Keene also looks at the company's previous high around $41 to determine that in the short term, the stock could move back up to the same level again.
"I use the options market to find a measured move target to the upside," he said. "They're implying that Delta can move $5 between December expiration."
Keene wants to buy the December 40-strike calls and sell the December 41-strike calls for a total cost of 25 cents per share, or $25 per options contract. If Delta closes at or above $41 by December expiration, that call spread will be worth $100 on the trade, or four times his initial premium.
Delta shares were down almost 2 percent in Wednesday trading, falling as low as $36.02. The Dow Jones U.S. airlines index is down about 19 percent this year.