2 Cruise Stocks Sinking After Trump, CDC Vaccine Comments

CCL and NCLH are facing eerily similar technical setups

Deputy Editor
Sep 17, 2020 at 10:30 AM
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On Wednesday, U.S. President Donald Trump announced the country could see a vaccine distributed as early as October, contradicting the six to nine month timeline the director of the Centers for Disease Control and Prevention (CDC) laid out for a widely distributed vaccine. These conflicting messages are taking their toll on the travel sector, and two stocks hit particularly hard are cruise operators Carnival Corp (NYSE:CCL) and Norwegian Cruise Line Holdings Ltd (NYSE:NCLH). Below, we'll dig into how RCL and NCLH are both faring today. 

Kicking things off with Carnival, the cruise operating giant recently cancelled voyages out of Miami, Tampa and New Orleans until late spring of 2021. In response, the equity is down 2.2%, last seen trading at $16.10. Although CCL has doubled off its April lows, the equity remains off 68.1% year-to-date, with this most recent rally contained by its 150-day moving average

Meanwhile, Norwegian Cruise Line stock is down 1.6% at $17.24 this morning, and sports an eerily similar technical setup to its sector peer. NCLH has more than doubled off its mid-March lows, and is facing an 70.5% year-to-date deficit. Additionally, the equity is also being contained by its descending 150-day moving average. 

Still, it's calls that are dominating the options pits for both securities. In fact, CCL and NCLH sport 50-day call/put volume ratios at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 2.56 and 3.10, respectively. Those ratios both rank in the 100th percentile of their annual ranges, implying an extremely ravenous appetite for long calls of late.

Echoing this is each stock's Schaeffer's put/call open interest ratio (SOIR). CCL sports an SOIR of 0.70, while NCLH's comes in at 0.31, which rank in the 8th and 1st percentile, respectively. Those low readings imply short-term options traders have been more call-biased than usual.


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