It is important to keep in mind that it is as easy to grab a win on a stock that is showing a clear predictable downward pattern as it is to profit from one that is rising. In this case Carnival is feeling the lingering pressure of higher oil prices and disrupted maritime travel. It’s stock price is sitting right at the low that as been tested a few times in the last 6 months. What happens next is the key to trading this clear pattern. Take a look at the chart.

CCL continues to show a strong bearish technical setup, with shares trading below the 8-, 21-, 55- and 233-day exponential moving averages as selling pressure has accelerated. The PPO remains firmly bearish and is moving deeper into negative territory, while the ADX has turned higher and the negative directional indicator (-DI) has expanded well above +DI, suggesting the developing downtrend is gaining strength. Relative strength versus the S&P 500 has also weakened. Shares are now testing support near $23.59; a decisive break below that level could open the door for continued weakness toward the next support area around $22.13.

Wishing you the best,

Wendy

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