Carnival Cruise Stock Sinks as Delta Variant Spreads

CCL is eyeing its lowest close since February

Assistant Editor
Jul 8, 2021 at 9:50 AM
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The shares of cruise concern Carnival Corp (NYSE;CCL) are down 3.9% to trade at $23.15, amid concerns about the spreading delta variant of Covid-19. The more transmissible variant has some investors worried about the rebound of the travel industry, especially after Tokyo --the host of the upcoming Olympics  -- declared a state of emergency in the wake of the its spread. Meanwhile, sector peers Norwegian Cruise Line (NCLH) and Royal Caribbean Cruises (RCL) are also lower this morning. 

Carnival stock's chart performance over the last month has been lackluster to say the least. Since topping out at two-year highs on June 8, CCL has shed 8.7%, and is now pacing for its fourth straight day of losses. In addition, the shares are at risk of breaching their 160-day moving average on a closing basis for the first time since November.

The analyst camp could not be further apart. Of the 13 in coverage, seven maintain a "hold" or "strong sell," while the other six are firmly entrenched in "strong buy" territory. What that means is decisive price action in either direction could result in a shift in analyst attention.

Now may be the perfect opportunity to weigh in on CCL's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 46% stands higher than only 10% of all other readings from the past year. This means options players are pricing in lower-than-usual volatility expectations.

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