After all, CCL bearings must not be torpedoed

<p>About a month ago, it seemed like the world was going to end. At the time, I was writing an article that suggested Carnival Cruise Lines (NYSE: CCL) could be an interesting turnaround after all was said and done. And if you just look at the price, the CCL stock is up about 20% from the $ 10 price at the time of that article.

Source: Ruth Peterkin / Shutterstock.com

Of course, writing about cruise ship stocks right now is sticking your finger in the air to test the wind … in a hurricane.

Just when it looked like things might not get any worse for the carnival, the CDC Centers (CDC) extended the No Sail Order for all cruise lines for three months. Consequently, Carnival announced that they had canceled all cruise routes until 26 June 2020.

Cruise lines are in the same boat

Unfortunately for Carnival, a phrase like “a petri dish on water” tends to stick. And that’s the description you hear attributed to cruise ships right now. The new corona virus never gives cruisers the opportunity to take a victory lap.

But if there’s a glimmer of hope in this marketing nightmare, it’s that misery loves business. Carnival is not designated. Right now, all cruise lines are facing the same threat.

This reinforces a point I made in my previous article on Carnival. How the company handles this crisis can affect whether and how much demand returns when the CDC gives cruise ships the green light. And no cruise ship will skip the gun to put customers aboard their ships.

Recent research Suggests that the carnival has a strong future

One of the reasons why the CCL share was so volatile was because the company is registered outside the United States. However, Matt McCall wrote that Carnival has overcome this obstacle and secured funding.

It gives investors the freedom to focus on the future of Carnival stocks. In a new article, InvestorPlace contributor William White referred to some recent tweets indicating that at least some previous customers are ready to sail.

“When you start sailing again, I start sailing again … Be kind to your excellent employees but … that’s what makes you great.” “Can not wait until this is over. We are planning a trip to December but we want to go on another before then. Saves my Covid check for a new cruise. ”

And if recent surveys are any indication, there may be a real pent-up demand. In a report to the Los Angeles Times, travel site CruiseCompete.com said they saw a 40% increase in 2021 cruise bookings compared to 2019.

The Times also reported that according to the Swiss bank UBS, cruise bookings have increased by 9% in the last month compared to the year before. And a large number of these customers booked new cruises, not just rescheduled a previously booked cruise. 76% of customers who canceled their cruise in 2020 accepted credit for a future cruise rather than taking it back.

Has CCL stock found a bottom?

For traders who have had the guts to trade CCL shares during the past month, it has provided opportunities for profit. During the five trading days from March 18 to March 25, the stock climbed over 90%. But next week it fell by about 55%. Since then, the stock has risen about 60%.

The problem at the moment on the technical side is that the stock may not show lower lows, but it does show lower peaks. And in early March, the stock chart showed the bearish death cross pattern.

Carnival did not create the problems that it faces. But it also means that they have less control over the final result. For that reason, I would put Carnival on your watch list. However, it is not a purchase until there is a clear picture of how extensive the demand will be. Given current trading patterns, the stock is not moving fast.

At the time of writing, Chris Markoch had no position in any of the above securities.