Carnival Share Price is Rallying But is Not Yet Out of The Waters

Carnival share price has made a strong comeback this year, climbing more than 32% from its lowest point in December. The CCL stock has gained more than 25% in price since the start of the new year and more than 15% in the past week.

CCL is Rallying

Carnival share price has been on a strong rally since the start of the year, pointing to a strong recovery. There are several catalysts behind Carnival’s rally. First, the world’s largest cruise company recently announced its intention to raise on-board and add-on prices. As a company that has been under intense pressure due to the Covid-19 pandemic, the announcement signals pricing confidence.

Second, Carnival recently announced that one of its subsidiaries, P&O cruises, has seen its strongest booking day in its history during the ‘wave period’. The wave period is a three-month period from January 1 to March 31when cruise lines historically book the largest number of cabins. According to Carnival, four of its five biggest booking days ever fall in the wave period of 2023.

Despite the rally, massive debts have continued to weigh on the stock. Carnival Plc has a $32 billion debt. According to its fourth quarter report, the firm spent $448 million in that period to cover its interest expenses. As such, even if Carnival’s operating income reached pre-pandemic levels, the interest expenses would wipe out nearly half of its profits.

Carnival Share Price Forecast

Carnival share price has been on a strong bull run for the past few weeks as shown in the daily chart. The CCL stock has moved above the 25-day and 50-day exponential moving averages. At the time of writing, CCL was trading 4.05% higher at 756.6p. Its Relative Strength Index (RSI) is at 49.

2023 is likely to be a good year for the Carnival Plc as its ship occupancy continues to rise. The CCL stock price is likely to move past the resistance at 856p in the near term. However, a move past the support at 556p cannot be ruled out.

CCL Price Chart

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