Will Carnival Cruises fall even more?

As one of the most affected stocks during the COVID Crisis is Carnival it has had its shares sharply decline since the start of the year. The world economy has had very different strategies to dealing with pandemic some starting to lift and ease restrictions while others brace for a second wave. Only time will tell but with second wave fears heating up it doesn’t look like restrictions will ease in the short term which has huge negative consequences for Carnival, we will look at the technical indictors that suggest Carnival may move even lower.

Money Flow

The Money Flow Indicator works very similarly to the Relative Strength Indicator however it takes the Volume of a stock into account were the RSI does not. This indicator that is used to detect if a stock is oversold or overbought. The default time period is 14 periods with values bounded from 0 to 100. A reading of above 70 means the stock is overbought highlighting a bearish signal that the stock might fall in price. This is the case with Carnival it is at 62 indicating that it might be overbought, as it is right at the top of the Money flow Indicator indicating that it is likely to fall in the future.

Arnaud Legoux Moving Average

The Arnaud Legoux moving average in my opinion is the king of all the moving averages for two primary reasons it is highly responsive to movements in the tread and it is also a-lot does a better job at smoothing out a tread. This was a common drawback for investors using traditional moving averages. Only made in 2009 the Arnaud Legoux moving average is new to the moving average family but insanely effective, as it is swifter eliminating the price lag that is often associated with moving averages. The fundamentals of the moving average remain the same however if the stock price in blue line moves below the Arnaud Legoux moving average in the red line it highlights a bearish trend is occurring indicating prices may fall. This is the case with Carnival as we can see the stock price has started to cross the Arnaud Legoux moving average.

Balance of Power

The Balance of power indicator is very simple when the line is above 0 it indicates that buyers have dominance over sellers and when it is below 0 it indicates that sellers have dominance over buyers. The indicator moves between 1 at the very highest and -1 at the very lowest the indicator tracks how strongly price trades to extreme high and low levels. The Reading CCL has is -.34 which strongly indicates sellers are dominating the buyers in the market pointing to the conclusion that CCL shares may move lower.

Volume

There is clearly a decrease in Volume highlighted by the vertical bars underneath the chart. Showing that trading activity among investors is decreasing which normally means that there is less interest among investors to buy. With a higher than average trading activity the volatility of Carnival is likely to increase as well as a likely increase in the value of the underlying stock.

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