Market Overview

Despite An Overall Downtrend, Carnival Has A Bullish Setup This Week


The following stock has been highlighted by VantagePoint Software, an artificial intelligence platform that provides market forecasts 1-3 days in advance.

Shares of Carnival Corp (NYSE: CCL) took an immediate 4 percent haircut in the aftermath of the company's weak Q2 earnings report, as Wall Street was less-than-thrilled with surprisingly weak guidance. The company's Q3 and fiscal year earnings per share guidance were both lowered, citing rising fuel costs and unfavorable currency exchange rates. 

Looking at a chart, we can see that Carnival is stil in the midst of a clear downtrend. The stock has continued to make lower highs dating back to January, as the chart below shows.


But barring a fundamental catalyst, the base appears to be in for CCL—at least for now. The stock has formed a clear rounding bottom pattern thanks to back-to-back up days, with the low of the move coming on July 3 at $56.45. Taking the global markets into account, VantagePoint is forecasting CCL to close up again on Tuesday, and trade within a range of $57.43-$58.45.

This is shown in the chart below. The blue line is a predicted moving average that forecasts 24 hours in advance. The black line is a simple, 10-day moving average. Notice what happened on Friday. Not only did the blue line cross above the black line, signaling a temporary change in trend, but the Neural Index at the bottom of the chart turned green. This is a predictor of price 48 hours in advance, and it's signaling that the price of CCL is likely to rise at least through Wednesday's session. 

However, it's still important to remember that Carnival is in a prolonged downtrend. This will continue until the long-term predicted moving average crosses above the black line (the first image).

CCL closed up 0.7 percent on Monday. 

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