Carnival Corp. (CCL) has made a relatively shallow correction or pullback the past four months. Prices could be ready for a recovery rally in the near-term. Let's make a shore excursion with the latest charts and indicators.
(For more on CCL, see Jim Cramer 'Mad Money' Lightning Round.)
In this daily bar chart of CCL, below, we can see roughly a $10 pullback from the late January zenith. There was a bearish dead cross of the 50-day and 200-day moving averages last month but prices have been closing above the 50-day line the past week or so. The declining 200-day line is only a few dollars above the market.
Take a look at the On-Balance-Volume (OBV) line which has been rising since early April telling us that buyers of CCL have been more aggressive. In the lower panel of the chart is the 12-day price momentum indicator which is showing a rising pattern from March to May.
This is a bullish divergence when compared to the price action which has been making lower lows. A slowing momentum picture can be a leading indicator to a turn to the upside.
In this weekly bar chart of CCL, below, we can see that prices are below the declining 40-week moving average line but the line is very close to the price action making it not too hard to close back above it on a rally.
The weekly OBV line has been pointed down for four months but could be turning back up again judging by the daily chart.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is below the zero line in bearish territory but the two moving averages that make up this indicator have begun to narrow and they could give us a cover shorts buy signal in the weeks ahead.
In this Point and Figure chart of CCL, below, we can see a minor downside price target of $59.93 - a slight new low.
Bottom line: Looking to take a cruise or buy stock in a cruise line company? CCL may be the one to put on your shopping list. Aggressive traders could go long CCL on a close above $68 and then risk below $64.
