Carnival share price has staged a strong recovery since the beginning of the new year. The stock has been among the best-performing stocks in the FTSE 250 index, climbing nearly 50% year-to-date. At the time of writing, the CCL stock was trading 0.87% higher at 890.2p.

Recovery?

Carnival share price has made a strong recovery this year after experiencing storms in 2022. Despite the recovery, Carnival’s shares remain more than 75% below their pre-pandemic levels. Even so, it is closer to 50% below pre-Covid levels.

The coronavirus pandemic was a total disaster for the travel sector, putting companies like Carnival Cruise Line in a tight spot. The pandemic left the largest cruise line operator shuttered, drying up its revenue and income, and leaving it drowning in huge chunks of debts.

During the pandemic period, Carnival was forced to raise money in a bid to survive the pandemic. As a result, the British-American cruise operator sold more shares and took more debt. CCL’s debt has roughly tripled since 2019, while its outstanding shares almost doubled.

Carnival’s business is not yet back to full speed even as tourists embark on sea traveling. Its revenue for the past four quarters remains more than 40% below the pre-Covid period, while its free cash flow is in billions in the negative. Rising operating costs, as well as macroeconomic data, are likely to limit further share price growth.

Carnival Share Price Forecast

The daily chart shows that the Carnival share price has been rallying over the past few weeks. The stock has managed to remain above the 25-day and 50-day moving averages, while its Relative Strength Index (RSI) has moved higher and is 4 points closer to the overbought region.

 Therefore, I expect Carnival’s recent momentum to be short-lived as macroeconomic factors weigh on the stock. A move below the important level at 856p will have sellers eyeing the support at 709p.