Carnival Traders Are Voting With Their Feet

A fundamental analyst at a major sell side firm cut their price target on cruise line operator Carnival Corp (CCL) to $7 and made a bearish case for the stock going to $0 (zero). Pretty drastic. Let’s check the charts to see if they are that bearish too.

In this daily bar chart of CCL, below, we can see that prices have traded lower the past 12 months. Trading volume has been heavy since December telling us that traders have gotten the message about the future of the company and they are voting with their “feet”.

The On-Balance-Volume (OBV) line has been in a decline for the past 12 months telling us that sellers of CCL have been more aggressive than buyers. The slope of the 50-day and 200-day moving average lines are negative.

The Moving Average Convergence Divergence (MACD) oscillator has crossed to a cover shorts buy signal.  

 

In this weekly Japanese candlestick chart of CCL, below, we went back five years instead of three years to give some perspective. Prices have suffered a big decline the past five years and now prices are poised to break the pandemic low of early 2020.

The slope of the 40-week moving average line is bearish. The weekly OBV line is bearish and so is the MACD oscillator. 

 

In this daily Point and Figure chart of CCL, below, we can see a price target in the $8 area. 

In this weekly Point and Figure chart of CCL, below, a downside price target in the $6 area is being projected. 

Bottom line strategy: The charts do not project a price target of $0 (zero), but they are bearish with targets of $8 and $6. Avoid the long side of CCL.