Carnival Corporation: CCL bounce this week places it at crucial resistance


  • Despite Thursday decline, CCL price still hugging top trend line.
  • New bond issue reduces debt payments with lower interest rate.
  • Carnival might reach 75% capacity by end of 2021.

The good news keeps arriving for Carnival Corporation (NYSE: CCL). After announcing on Tuesday that it was projecting to reach 65% to 75% capacity by year-end, the embattled cruise leader announced the closing of a $2.4 billion bond issuance at a much lower interest rate.

Carnival Stock News: Good winds blowing for CCL

After three days of high volume and even a gap up to boot, CCL stock lost ground on Thursday, down 2.1% at $22.71. Even the dip there, however, was a silver lining. The early session pullback pushed Carnival down to just above the 9-day Simple Moving Average (SMA) at $22.11. From here, CCL price bounced to end the day more than 2.3% off the low, providing the daily chart with a bullish long lower wick.

Management's call on Tuesday surprised investors still reeling from Monday’s Delta panic. Top leadership said with increased current travel and bookings that the cruise company would make it back to 65% of capacity by year-end. Additionally, they were confident that if things kept improving at the same pace in the second half of the year, then 75% capacity is a real possibility.

Next on Wednesday, Carnival announced a deal to sell $2.4 billion in bonds in order to retire junk bonds issued at the height of the pandemic with an 11% coupon. This was back when some had doubts about CCL as an ongoing concern. The new bonds are not due until 2028 and offer a much better 4% coupon, which demonstrates that the market now accepts the Carnival turnaround saga. CCL sailed upward on the news.

All the while, Carnival has been using its $9.3 billion in cash to buy up its own shares. Since June 30, the company has taken 1,875,127 shares off the table. This is a long-term bullish activity since shares held within the corporation are not counted in the daily float and, thus, reducing the supply.

CCL chart: Can Carnival swim past trend line barrier?

Pre-pandemic, the stock was trading around $50. Since April 2020 when it bottomed out at $7.80, CCL stock has been on an even upward keel. It seems the Dave Portnoy's and YOLO-crazed RobinHooders may have been right on this one. After consolidating in late June above $30, however, CCL stock has backtracked severely, losing about a third of its market cap.

Since the June highs, the stock has receded in a rather narrow descending channel. Wednesday’s gap up and Thursday’s semi-bullish doji both sit right on the top trend line. Friday's price action will tell the future. Either CCL lets go and falls to the bottom trend line near $19.28 or it uses Thursday’s bounce off the 9-day SMA to rise to $24.12 – the 20-day SMA that it has not touched since June 17. If it makes it past here, there is further support-turned-resistance at $24.85 from March and May. At 41, the Relative Strength Index (RSI) remains in bearish territory.

CCL 1-day chart

 


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD higher in range as stocks run

EUR/USD recovers amid a better market mood, but tepid European data prevent it from advancing further. Relief news related to the Chinese giant Evergreen boosted sentiment despite tepid data in EU and the US.

EUR/USD News

GBP/USD rallies to 1.3700 with BOE's tightening hints

GBP/USD jumped to 1.3700 as the Bank of England hinted at a rate hike as the first step towards normalization. MPC voted 9-0 to leave rates on hold but voted 7-2 on reducing QE. Higher rates before trimming facilities are BOE's preferred movement. 

GBP/USD News

XAU/USD edges higher on weaker USD, hawkish Fed/risk-on to cap gains

Gold attracted some dip-buying near the $1,760 region on Thursday and for now, seems to have stalled the post-FOMC retracement slide from the $1,787 area, or weekly tops. 

Gold News

Crypto markets take off without clear goals

Bitcoin price shows a healthy bounce off the 79% Fibonacci retracement level at $40,727, suggesting temporary relief. Ethereum price creeps back above the $3,000 psychological level as it follows in BTC’s footsteps.

Read more

Vinco Ventures Inc keeps falling, as key deadline nears

NASDAQ: BBIG fell for the second straight day on Wednesday and eroded another 2.95%, ending the day at $6.57, still off the three-week troughs of $5.93 reached a session before.

Read more

Forex MAJORS

Cryptocurrencies

Signatures