Wednesday night in his "Executive Decision" segment of Mad Money, Jim Cramer sat down with Arnold Donald, president and CEO of Carnival Corp. (CCL) . CCL has declined as investors have fretted about rising fuel costs and additional competition. Regular readers of Real Money know that I do not pay much attention to the causes of price movements but rather the effects. Let's check out the charts and indicators of CCL. Maybe we can get a cabin upgrade.
We last reviewed CCL 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."
In the daily bar chart, below, we can see that CCL did indeed bounce sharply into late September but that rally ended very quickly with a gap to the downside. Prices have not erased all of the gains but it looks like we are headed in that direction. Prices are back below the declining 200-day moving average line and the cresting 50-day average line.
The daily On-Balance-Volume (OBV) did move up from early July signaling more aggressive buying but the line has quickly reversed to the downside. The Moving Average Convergence Divergence (MACD) oscillator crossed to a buy signal in August and is now back to the zero line a perhaps a new sell signal.
In the weekly bar chart of CCL, below, we can see the zenith in early 2018, the summer rebound and the turn lower again. Prices were only briefly above the 40-week moving average line.
The weekly OBV shows a straight line rise and then reversal. The weekly MACD oscillator generated a cover shorts buy signal in August but the two lines of this indicator have narrowed (again) and could cross to a fresh sell signal in the weeks ahead.
In this Point and Figure chart of CCL, below, we can see a possible downside price target of $54.69 being projected. This would be a new low for the year.
Bottom-line strategy: Like our recommendation in early July, I think traders and investors (and people looking to go on a cruise) should wait for a better buying opportunity.