CCL's short interest has dropped 34% year-to-date
Carnival Corp (NYSE:CCL) has been trending higher for the past 13 months, boasting a 29.6% year-to-date lead. What's more, the shares are on track to extend their monthly winning streak to 14, and hit a new record high of $69.23 last Tuesday, Aug. 15.
Despite the solid technicals, not all analysts are convinced. Of the 14 brokerages covering CCL stock, six rate it a "hold" or worse. This indicates that there is plenty of room on Carnival's bullish bandwagon, and upgrades could push the stock even higher.
The stock could get an additional boost, too, if short sellers remain in cover mode. Although short interest is down 34% year-to-date, it would still take five days to repurchase the remaining bearish bets, at CCL's average pace of trading.
Options traders have shown an unusual preference for long puts over calls lately, as CCL's top-heavy 10-day put/call volume ratio of 3.18 across the major exchanges ranks 3 percentage points from a 52-week high. Heavy put open interest is docked at the underfoot September 65 put, which could serve as options-related support in the near term.
Lastly, our recommended call has a leverage ratio of 8.7, and will double in value on an 11.2% rise in the underlying equity.
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