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New Long Plays

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New Short Plays

Royal Caribbean - RCL - cls: 45.50 chg: -2.00 stop: 48.01

Company Description:
Royal Caribbean Cruises Ltd. is a global cruise vacation company that operates Royal Caribbean International and Celebrity Cruises, with a combined total of 29 ships in service and two under construction and one on firm order. The company also offers unique land-tour vacations in Alaska, Canada and Europe through its cruise-tour division. (source: company press release or website)

Why We Like It:
RCL is yet another company who exceeded Wall Street's earnings estimates but investors sold the news anyway. The stock has fallen through several levels of technical support in the last couple of days including the 200-dma, 40-dma, 50-dma, and exponential 200-dma. Plus, almost all the technical indicators on both its daily and weekly charts are negative. Volume was way above average on today's decline. This looks like the start of a new consolidation lower at least toward its April lows. Traders have a choice on how they want to open the play. One strategy would be to look for confirmation of today's breakdown with a new decline tomorrow under $45.50. Another strategy would be to wait for a possible oversold bounce back toward the $47.00 level near its 50-dma and use a failed rally there as a new bearish entry point. We, the newsletter, will merely open hypothetical shorts at current levels. Our target is the $41.25-41.00 range. We are starting with a wide (aggressive) stop loss because we do suspect an oversold bounce tomorrow.

Picked on July 27 at $45.50
Change since picked: + 0.00
Earnings Date 07/27/05 (confirmed)
Average Daily Volume: 1.3 million
 

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