The graphs indicate that this cruise stock is experiencing a ‘double top breakout’

Royal Caribbean Shares Surge to New Heights

This week, Royal Caribbean’s (RCL) shares hit an all-time high, fueled by fresh optimism as summer approaches. Analyzing the technical aspects reveals that this might be just the beginning for the cruise line’s stock. It’s interesting to dive into some key insights regarding price and volume trends; there’s definitely a classic charting method that sheds light on how prices behave.

On RCL’s daily chart, there’s a pattern indicating that “moving averages are in the right order.” To elaborate, the 20-day exponential moving average sits above the 50-day simple moving average, which in turn is above the 200-day moving average. All three are trending upwards, signaling a steady increase in prices. This recent push has helped Royal Caribbean break through a significant resistance level near $275—first hit in January and retested earlier this month. After a brief pullback, the stock managed to move beyond that threshold.

What’s really telling is the relative strength. Since the market’s downturn in April, RCL has outperformed the S&P 500. Not only has the stock gained in absolute value, but it’s also exceeded this benchmark during the same timeframe. With enhanced momentum indicators and relative strength readings, the daily chart seems to be firing on all cylinders.

Another aspect to consider is the volume trends. Since reaching a low in April, the on-balance volume has consistently risen, indicating an influx of buying activity. As long as this trend continues, it suggests solid support for the ongoing upward trajectory.

In the lower panel, the Chaikin Money Flow (CMF) indicator, which assesses daily volume in relation to price movements, also shows promising signs. The CMF dipped slightly below zero in early April but has since climbed back above, indicating a clear accumulation phase with substantial volume backing it.

Lastly, let’s delve into some traditional technical analysis with points and figure charts. These have been a staple in trading pits, particularly in Chicago, where traders sketch charts based on their daily transactions. In these charts, an X signifies an uptrend, while an O marks a downtrend. By focusing on these patterns, traders can cut out the daily price noise and hone in on meaningful signals. An interesting note: a significant drop in the O column—known as a “low polar warning”—occurred earlier in April. However, the subsequent X column suggests a gentle easing of the downward trend, allowing traders to reassess. Recently, a “double top breakout” emerged, with the X column surpassing the previous one, which is a classic buy signal in Point & Figure analysis, hinting at a new upward trend.