Cruise ships are run aground by the CDC. The charts show that there has been some warning about today’s news. – March 24, 2021
CCL NCLH RCL
I want to look at the cruise lines today because they have all kind of come back into port and it doesn’t look like they are going to go out for a while. That wasn’t really meant to be a joke but it was spontaneous.
Here’s the deal, the CDC, Center for Disease Control, I’m not really sure that they control the disease, but whatever. Anyway, they barred cruises in US waters. In other words, no cruises in or out or around the United States until November 1st. And so that pretty much wipes out the summer season. It wipes out a lot of anticipated revenue because there is pent-up demand for stuff.
Why they are doing that with respect to the state of the virus and all that, it isn’t for me to say, I don’t know. I am scared of COVID just like everybody else. I don’t want it, I don’t want anything to do with it. But I will tell you one thing, I am not going to take a cruise either. I have been on those cruises before; I can’t tell you the number of times that I have seen some kid wipe the snot off of his nose and then grab the doorknob to go into the next hallway or whatever it is. It’s not exactly the last bastion of cleanliness so it’s definitely not my deal.
Here’s the thing, I don’t see it going much lower here, simply because the news is out today, and what is going to happen tomorrow? Is there going to be another news story where the CDC says, we really do mean it, we’re not kidding around, we really do mean it.
What I am saying is, the news tends to get factored into this stuff really fast. And the kind of garden variety rule of thumb for the markets discounting mechanism, where the market looks forward, is about 6 months or so. I don’t know who decided that but I have heard that throughout my career, so sure. And so if that’s the case, you go 6 months forward and you are into September, which is really close to November. You are through these crappy summer months.
What I am telling you is, I wouldn’t buy these things, I would sell them right now Even though, oh my gosh, but Dan, it’s about to bounce off the 50. Yes, that’s fine, great, maybe it will, maybe it won’t. But am I going to make money by holding this through the summer?
If I look at Norwegian ( NYSE: NCLH ), the same thing. By the way, I think they are probably beyond sailing in and out of Norway. This is all kind of the same thing. And then this one, Royal Caribbean ( NYSE: RCL ), it looks a lot like Carnival ( NYSE: CCL ), it looks a lot like Carnival ( NYSE: CCL ). And so we see all of these things, they are going to test the 50-day moving average.
What I am suggesting that you do is, ask yourself, if you are buying it here then what are the odds that it’s going to go into this box because this is the good zone? We will make this green; it goes into the green zone, that’s good. But is it going to run? Is it going to run all of the way through? Are you buying it here at the 50 and it’s going to rush right in there and you are going to make a gang of money? I don’t think so. Or is it going to flip down to here and fall below $80.00? In which case, guess what? That’s the red zone.
I think it’s a toss-up either way. And if it’s a toss-up I don’t want to play because I don’t believe in toss-ups in trading, I think you have got to have an edge. Right now my question is, even if it does bounce, how fast is it going to go up? So I think this stuff just bears watching and I am not being a bear on these, I am being a realist. You want to watch them and see how they trade from here. It could be the mother of all buying opportunities, but my bet is it isn’t going to be tomorrow.
I would want to stay away from these stocks until you get a clear view of what they are going to do with this 50-day moving average. That is really what it gets right down to. You see Carnival ( NYSE: CCL ) there. You see Norwegian ( NYSE: NCLH ) there as well. You have got to get a resolution from the 50-day moving average because if you don’t you are wishful thinking; you are hoping, you are dreaming, you aren’t trading.
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