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Cruise Ship Stock Alert: Trading Carnival, Royal Caribbean After New CDC Comments

Cruise stocks are actually trading pretty well given the climate around the new Covid variant Omicron and the recent comments from the CDC.

Carnival Cruise  (CCL) - Get Carnival Corporation Report, Royal Caribbean  (RCL) - Get Royal Caribbean Group Report, Norwegian Cruise Line  (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report and others are in focus following fresh comments from the Centers for Disease Control. 

On Thursday, the CDC said that travelers should “avoid cruise travel, regardless of vaccination status.”

That’s even after the CDC reduced its Covid isolation time from 10 days down to five.

The new Omicron variant has already altered plenty of plans. Thousands of flights have been canceled and many peoples’ holiday plans have been cancelled.

College football bowl games have been canceled, the NHL has altered its schedule and that’s just the tip of the iceberg.

On the plus side, while the new Covid variant has proven to spread quickly, it has led to fewer hospitalizations. That’s at least one promising trend that we’ve seen with it.

As for cruise stocks, they are taking the new variant in stride — as well as the news today from the CDC.

Trading Carnival Cruise Stock

Daily chart of Carnival Cruise stock

Daily chart of Carnival Cruise stock

Right off the bat, the first thing I take note of is how a stock is trading vs. the news. Is the story good or is it bad? That story can be earnings, M&A or in this case, a surging variant and comments from the CDC.

So far, the stock is handling the news incredibly well.

Shares are down in a fifth straight session, but continue to hold the 10-day and 50-day moving averages.

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I would love to see Carnival stock rotate up through $21.80. If it can do that, downtrend resistance (blue line) is in play, followed by the 200-day moving average up near $24.

On the downside, a break of recent support near $20 and the 10-day moving average could put the 21-day moving average and uptrend support in play.

Below all of these measures and we could be talking about $17.50 next.

Trading Royal Caribbean Stock

Daily chart of Royal Caribbean stock

Daily chart of Royal Caribbean stock

Turning our attention to Royal Caribbean yields a similar setup.

Royal Caribbean stock is working on its fourth straight daily decline, but the bulls continue to buy the lower opens and dips to the 10-day moving average.

That said, it’s stuck below the 50-day.

If the stock can get a push over $80, it could quickly put the 200-day moving average in play, along with short-term channel resistance.

Above both marks could open the stock up to a stronger rally, potentially putting resistance in play near $97.

On the downside, it’s similar to Carnival stock. A break of the 10-day puts the 21-day moving average and channel support in play. 

Below these measures and a dip below $70 could be in the works.

The bottom line: I love the way these stocks are holding up amid the current news cycle. That’s bullish, but we need some rotational proof. Without it, we don't want to get caught holding the bag if they turn lower.