Carnival Share Price is at Risk of a Major Bearish Breakout

The Carnival share price is under pressure. In London, the shares have dropped to 1,682, which is about 8% below the 28th April high of 1,763p. In New York, the CCL stock prices closed at $26.68, which was 4.48% below where it closed on Monday. 

What happened: Carnival and other cruise lines companies like the Royal Caribbean and Norwegian were the worst-affected companies by the coronavirus pandemic. The companies were forced to pack their ships as people stayed indoors. 

Unlike airlines and restaurants, the companies did not receive any government bailout money because they are not registered as American companies. Therefore, all companies burnt billions of dollars and decommissioned tens of ships.

This year, however, there has been optimism that the cruise industry will bounce back as more countries ramp up their vaccination plans. Still, while millions of people have been vaccinated, these companies have not resumed their normal operations. This is mostly because of the CDC, which has added more precautions that companies must put in place to resume sailing. This week, Carnival canceled all its voyages for July. The company said:

“While we evaluate the CDC’s new guidance on the resumption of cruising from the U.S., we have closed for sale all July voyages except for Carnival Horizon, Carnival Vista, and Carnival Breeze. We have taken no other actions on these cruises, and will update guests and travel agents once we finalize plans for the resumption of guest operations under the new CDC guidelines.”

Therefore, there is a possibility that the cruise industry will take longer than expected to bounce back. 

Carnival share price forecast

The four-hour chart shows that the Carnival share price has been under pressure lately. It has formed an ascending channel that is shown in red. At the same time, it seems to have formed a head and shoulders pattern. In price action, this pattern is usually a bearish sign. Further, the 25-day and 50-day exponential moving averages (EMA) have made a bearish crossover pattern. 

Therefore, there is a possibility that the downward momentum will continue. This pattern will be confirmed if the shares move below the lower side of the channel at 1,550p. However, a move above the right shoulder at 1,763p will invalidate this trend.

Please don’t consider this investment advice. Views expressed here are those of the writer and the writer and InvestingCube will not be held liable for any losses.

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