Carnival Corp. (CCL) was reviewed in early July where I wrote that "CCL could stage an oversold bounce but with most of the indicators pointed down I would avoid the long side of CCL until a bullish divergence and some aggressive buying materializes."
I haven't seen a bullish divergence between the price action and the indicator but the On-Balance-Volume (OBV) line has been very strong. Let's grab our passports and check on the charts of CCL again.
(For more on CCL see: Carnival Corp., Manitowoc, Tootsie Roll: 'Mad Money' Lightning Round)
In this updated daily bar chart of CCL, below, we can see that the price of CCL firmed to test the declining 50-day moving average line. The 200-day line is still well above the market.
The daily On-Balance-Volume (OBV) line has rallied smartly from early July and is poised to move above the June peak.
The Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts buy signal last month and is close to moving above the zero line for an outright go long signal.
In this weekly bar chart of CCL, below, we can see that prices are still below the declining 40-week moving average line.
The weekly OBV line shows a sharp improvement in recent weeks and the MACD oscillator has narrowed towards a cover shorts buy signal on this longer time frame.
In this Point and Figure chart of CCL, below, we can see an upside price target of $64.07.
Bottom line strategy: CCL hasn't made a big bottom but the chart has improved and we could see a rally to the mid $60's in the weeks ahead. Not a 'round the world cruise but at least seven days in the Caribbean.