In one "Executive Decision" segment of Mad Money Tuesday night, Jim Cramer sat down with Frank Del Rio, president and CEO of Norwegian Cruise Line Holdings Inc. (NCLH) , a stock that's already up 30% for 2019. Del Rio started off by saying that by the end of last year, everyone feared the worst for the cruise lines. They thought that a recession was coming and additional ship capacity would destroy gross margins. But instead, there was no recession and the new capacity has been absorbed and their ships remain full.
Del Rio added that he has 11 new ships ordered that will be delivered at a steady pace over the next few years. His company continues to have great visibility and cash flows.
Let's check out the charts before we leave port.
In the daily bar chart of NCLH, below, we can see a mixed picture. Prices have rallied sharply from late December but the indicators have weakened in the past month. NCLH jumped significantly in price but trading volumes have not risen and in fact have declined the past few weeks.
The daily On-Balance-Volume (OBV) line has been weakening since late February suggesting that sellers have quietly become more aggressive. The 200-day moving average line only shows a slight rise from mid-February and the Moving Average Convergence Divergence (MACD) oscillator has been in a take profits mode from the end of February.
In the weekly bar chart of NCLH, below, we do not have a lot of price action to work with. Prices are above the slightly rising 40-week moving average line.
The volume pattern is not bullish and the weekly OBV line shows a peak in February. The MACD oscillator is above the zero line but starting to narrow.
In this Point and Figure chart of NCLH, below, we can see a nearby Point and Figure target of $61 but a decline to $53.62 will start to weaken this chart.
Bottom-line strategy: The fundamental story on NCLH may appears bullish but it looks like prices have already discounted a lot of good news. NCLH looks vulnerable to a decline as the second quarter approaches.
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