Carnival (CCL) Share Price Approaches Key Level Ahead of Earnings

The Carnival share price rebound has accelerated this year even as the world’s biggest cruise continues burning cash. CCL stock is trading at 1,770p in London, which is a 120% gain from last November’s low of 807p. It is also slightly below the year-to-date high of 1,800p.

What happened: Carnival shares have been doing well lately as investors look ahead to the reopening of major countries because of the vaccine. Shares of other cruise liners like the Royal Caribbean and Norwegian have also rallied recently. 

Today, the stock is rising as traders wait for the company’s trading update that will come out at 10:00 EDT. In general, expectations are significantly weak since the company is burning more than $530 million per month. As such, analysts expect that revenue declined by about 96% to less than $100 million.

The Carnival shares are also rising after the CDC said that it will recommend restarting cruise travels in mid-summer this year. Since many people have not traveled in the past year, there are hopes that many of them will start considering cruises. In a statement yesterday, the firm said that it was canceling and extending US cruises until June 30 this year.

In general, Carnival is in a good financial position after it raised $1 billion early this year by selling its shares. In 2020, the firm raised more than $7 billion, which helped to sustain it as it continued to burn its cash.

Carnival share price forecast

The daily chart below shows that the Carnival share price has been in a strong upward trend in the past few months. Today, the stock is approaching the important resistance at 1,800p, where it has struggled to move above three times before. The shares seems to have formed a double-top pattern whose neckline is at 1,480p. It is also being supported by the short and longer-term moving averages. 

Therefore, while the shares may keep rising, we should not rule-out a major pullback because of the double-top pattern. However, a move above 1,800p will signal that bulls have prevailed and that they will start eying 2,000p.

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CCL stock price chart

Carnival share price

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