Will Royal Caribbean Bottom on Earnings?

Royal Caribbean is trading lower after earnings, although it's not exactly breaking down. Let's look at the charts to see how the stock looks now.
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In early trading, it looked like Royal Caribbean  (RCL) - Get Report was ready to rally after reporting earnings.

While shares were down about 3.5% after the results, the stock is actually holding up pretty well under the circumstances. That's after a quarterly loss of $1.48 share, which came in well wider than analysts’ expectations for a loss of 55 cents.

Revenue sank 16.8% year over year to $2.03 billion, beating expectations by $30 million.

If the company (and world) can continue striding back toward “normal,” then Royal Caribbean should be fine. That seems to be the tone in the stock’s price action too, as shares carefully tread higher.

While the stock is down on Wednesday, the chart has been pretty constructive over the past two months. Let’s look at it more closely.

Trading Royal Caribbean

Daily chart of Royal Caribbean stock.

Daily chart of Royal Caribbean stock.

There’s loads of bad news here, but also some positives. For instance, Royal Caribbean stock is still 69.7% off its one-year high. However, that’s better than the 74% slump in Carnival Cruise  (CCL) - Get Report and the 78.8% fall in Norwegian Cruise Line  (NCLH) - Get Report.

Additionally, shares can’t even reclaim 23.6% of the decline. That’s despite the S&P 500 currently above the key 61.8% retracement — highlighting just how much the cruise industry has lagged the overall market.

On the plus side though, shares are putting in a series of higher lows, as shown via uptrend support on the daily chart (blue line).

Despite Wednesday’s decline, Royal Caribbean stock is also holding up above the 20-day and 50-day moving averages. For now, the former is acting as support.

A move below the 20-day moving average puts the $35 area in play. There it finds uptrend support and the 50-day moving average. If shares fall below $33, Royal Caribbean stock will lose vital support and put bulls in a precarious position.

On the long side, a close above $50 would be very significant. Not only has this level been very stiff resistance, but it would mark Royal Caribbean’s first close over $50 in more than two months and put it over the 23.6% retracement.

Above $50 puts $56.25 in play, the March 9th gap-down level. Above that and it can fill the gap up toward $60. It will also put the 38.2% retracement in play near $63.