New Stock Sale Sinks Carnival Corp

Carnival Corp (CCL) announced a $1 billion common stock offering Thursday and traders reacted with sell orders. CCL was recently down about 10% on heavy trading volume. Let’s check out the charts to see if things are sea worthy going forward.

In this daily bar chart of CCL, below, we can see that prices bounced up towards the 50-day moving average line on Wednesday. Prices gapped lower Thursday on the news of more supply. The On-Balance-Volume (OBV) line has been in a decline from late September and tells us that sellers of CCL have been more active than buyers for months now. The Moving Average Convergence Divergence (MACD) is improving but remains below the zero line. 

In this weekly Japanese candlestick chart of CCL, below, we fail to find enough bullish clues to suggest purchase. Prices are trading below the declining 40-week moving average line. The weekly OBV line shows a lengthy decline and only limited recent improvement. The MACD oscillator is pointed down but close to a cover shorts buy signal.

In this daily Point and Figure chart of CCL, below, we can still see an upside price target.

In this weekly Point and Figure chart of CCL, below, we can see a potential downside price target in the $6 area.

Bottom line strategy: CCL was down on the day but near the highs of the session. Overall, the charts suggest further weakness is possible and avoiding the long side of CCL seems to be the best course to plot.