For his second Executive Decision segment of "Mad Money" Monday, Jim Cramer spoke with Frank Del Rio, president and CEO of Norwegian Cruise Line Holdings (NCLH) , the cruise line operator
Norwegian Cruise Line finds itself locked in a battle with the Centers for Disease Control and Prevention (CDC) over the timing and protocols needed to resume sailing from the U.S. Shares of Norwegian rose 7% Monday after the company offered up its latest round of proposals for safe operations.
Cruise lines in Europe and Asia have been sailing for months with only 50 reported cases of COVID, Del Rio said, and all those cases were handled beautifully. Norwegian has asked the CDC to allow the company to begin sailing beginning on July 4, three months from now, with only vaccinated passengers.
"It's time to start cruising again," he said.
We last looked at the charts of NCLH back on Feb. 17 and wrote, "Everyone is eagerly awaiting the return of travel, including cruising. The charts of NCLH suggest that people will continue to be disappointed. I would avoid the long side of NCLH."
Let's check out the latest charts to see if there has been improvement.
In this daily bar chart of NCLH, below, we can see that prices rallied about $10 after our review but then gave back all those gains last month. NCLH gapped higher on Monday but the indicators have not yet responded with a strong vote. Prices are trading back above the rising 50-day moving average line as well as the rising 200-day moving average line. The trading volume shows some periods of strength since July but nothing consistent and growing. The On-Balance-Volume (OBV) line shows a rise from August, telling us that buyers of NCLH have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line for months but could be turning more positive now.
In this weekly Japanese candlestick chart of NCLH, below, we see a mixed picture. Prices are trading above the rising 40-week moving average line. The trading volume and the OBV line are not in gear with prices on the upside. Buyers are either very quiet or just not being aggressive. The MACD oscillator is above the zero line but has narrowed toward a potential downside crossover.
In this daily Point and Figure chart of NCLH, below, the price gaps are filled in and we can see a potential upside price target in the $37 area.
In this weekly Point and Figure chart of NCLH, below, we see a longer-term price objective in the $58 area.
Bottom line strategy: Aggressive traders could probe the long side of NCLH, risking to $23. Add to longs above $36. The $58 area is our long-term objective.