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Carnival Share Price Forecast: Time to Buy the Dip?

The Carnival share price has struggled in the past few days as investors eye the ongoing tensions between the firm and the CDC. The CCL share price is trading at 1,670p, which is slightly below the year-to-date high of 1,850p. Still, the stock has jumped by more than 30% this year alone. 

What happened: It has been a good year for Carnival and other cruise liners. The Carnival, Royal Carribean, and Norwegian cruise liners shares have jumped by more than 20%, as shown above. This performance is mostly because the industry is expected to rebound once countries make significant progress on vaccination. 

However, in the past few weeks, as shown above, these stocks have struggled. This is partly because of the recent guidance by the Centres for Disease Control (CDC) that pushed their reopening past summer. As a result, the companies have complained that this guidance is unfair to them. For example, in a recent interview with Bloomberg, Carnival’s CEO said:

“Over 400,000 people have sailed in Europe with fewer than 50 cases of Covid, all handled seamlessly without disruption. And that all happened before vaccines.”

There are also concerns about the so-called vaccine passports. While Royal Carribean has said it will only admit vaccinated people, Carnival has said that it will not demand such vaccinations. Doing so, the CEO argued, would interfere with individual liberty.

Recently, Carnival has said that it the restrictions remain, it will abandon its US locations, which will hurt many local economies. The Carnival share price has also risen recently as investors start pricing in a potential return to dividends in 2022. This is after the firm managed to reduce its cash burn in the first quarter. Also, recent data shows that there is strong demand for cruising in most countries.

Carnival share price outlook

Turning to the four-hour chart, we see that the Carnival share price has struggled lately. At the current price, it is slightly above the lower line of the ascending trendline. It has also crossed the important 25-day and 50-day exponential moving averages (EMA). The stock has also moved slightly below the 23.6% Fibonacci retracement level. 

In my view, the stock will continue falling if bears manage to move below the ascending trendline. If this happens, the next key level to watch is the 38.2% retracement at 1,550p. However, now that it is in a strong level of support, we could see a rebound as bulls target the upper side at 1,850p.

CCL share price chart

Carnival share price