Shares of Carnival Corp (CCL) continue to decline as fears over COVID-19 rise. The likelihood of a major drop in cruise passengers is almost assured at this point. The key to a trade is understanding when price reflects a worst-case scenario. On a near-term basis, a major technical support level is found at $29.00. This level likely will give rise to a near-term bounce in the stock. At this price, the stock will be down 40% from its January 2020 highs.
It is important to remember that like the flu, coronavirus will likely subside as the weather warms. This means it is a near-term impact, maybe 3 months. Based on this thought process, it is very possible the $29 level gives rise to major upside. I will be a buyer on Carnival Corp at $29 based on the major technical support level plus the logical thought process on the summer coming and the virus subsiding.
(Click on image to enlarge)
Comments
Log in or sign up to join the conversation.