Carnival Catches Some Wind But It’s a Long Journey Back

Shares of Carnival Corp. (CCL)  are higher Wednesday as traders respond to news that the cruise line reported a smaller-than-anticipated loss in their most recent fiscal quarter. Huge ships can take a while to turn around, though, and that is no different with some stocks.

Let’s check out the charts of CCL before we head to our stateroom.

In the daily bar chart of CCL, below, I can see Wednesday’s rally but also a longer-term decline from February. The shares made a low in October but the rebound ended abruptly in November and prices retreated. CCL could close above the 50-day line soon but it will still be below the declining 200-day line.

The math-driven On-Balance-Volume (OBV) line made a low in October and improved into November and then turned sideways (neutral). The Moving Average Convergence Divergence (MACD) oscillator recently moved below the zero line for a new outright sell signal. If the strength in CCL continues we could soon see a new buy signal from the MACD oscillator.

In the weekly Japanese candlestick chart of CCL, below, I see a picture that is still bearish. Prices are in a longer-term downward trend and trade below the negatively sloped 40-week moving average line.

The weekly OBV line was weak from the middle of 2021 but has turned more positive since the beginning of October. The MACD oscillator is below the zero and has narrowed towards a new sell signal.

In this daily Point and Figure chart of CCL, below, I can see that prices have reached a downside price target in the $6.50 area. A trade at $11.50 is needed to turn this chart positive.

In this weekly Point and Figure chart of CCL, below, I can see the same setup as the daily chart above. Prices have reached a price target of $6.50 and a trade at $11.50 is needed for an upside breakout.

Bottom-line strategy: Traders love turnarounds. News that CCL had a smaller-than-anticipated loss smells like a turnaround. No wonder the shares of CCL are up more than 4%. Unfortunately the rally Wednesday for CCL does not move the needle all that much.