PreMarket Prep Inventory Of The Day: Royal Caribbean Cruises – Royal Caribbean Cruises Ltd (RCL)

Petrol Gas PreMarket Prep airs every morning from 8:00 a.m. to 9:00 p.m. ET. During this fast-paced, highly informative hour, traders and investors tune in to get the day’s most important news, the catalysts behind those moves and the corresponding price movement for the upcoming session.

Each day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

For those who don’t have the time to tune in live or listen to the podcast, Benzinga will highlight a stock that deserves further discussion. This analysis is not a buy or sell recommendation.

A rebound in cruise ship stocks continues to encounter bumpy waters. While there has been an abundance of good news regarding a COVID-19 vaccine, the problems in this sector are far from their March recovery highs and have given up some of their gains from earlier in the week.

The PreMarket Prep Stock of the Day, Royal Caribbean Cruises Ltd (NYSE: RCL) is one of the most popular topics in the industry.

Royal Caribbean rebound is starting to fade: While the S&P 500 index bottomed out on March 23, Royal Caribbean hit the same on March 18 at $ 18.25. This was its lowest level since October 2011, when it bottomed at $ 18.70.

While the index has continued to rebound, the issue peaked at $ 75.22 at the height of the reopening frenzy on June 8th. So far, the decline from that high ended at $ 45.08 on June 29th and has subsided in the past few weeks.

As of Wednesday, the problem was struggling to recover and stay in $ 50 trading.

Royal Caribbean sets sail with a big rally: On Wednesday, the issue had one of its biggest rallies ever, gaining 21% after gaining $ 10.21 and rising from $ 48.15 to $ 58.36.

Whenever this problem gets worse, it’s triggered by positive news from one of the drug companies working on a coronavirus vaccine – even little good news regarding a positive result from a drug study.

It was Wednesday Moderna Inc (NASDAQ: MRNA) are turning to fuel the vaccine craze in the markets.

Royals dead hop: As is common with stocks in a bear market, there are always dead cat bounces. In other words, counter-trend rallies that investors use to exit an issue or take a short position.

Of course, the dilutive move Norweigian Cruise Line took Thursday with a $ 250 million stock offering at $ 15 – well below its Wednesday close of $ 18.50 – had worried investors that Royal Caribbean did the same must do to stay afloat.

As a result, Royal returned nearly half of Wednesday’s profit, falling from $ 58.36 to $ 53.94 in Thursday’s session.

It’s hard to make money when there are no cruises: Before Open Friday, the CDC extended the suspension of “passenger operations on cruise ships with a capacity of at least 250 passengers in waters” until September 15.

In simple terms, it means that companies in the industry will continue to lose more money and accumulate more debt with little or no money coming in for at least a few months. It’s certainly not a recipe for a cruise company rally.

PreMarket Prep analyzes the price development of Royal Caribbean: With the inconsistent news flow across the industry, it is difficult to trade Royal Caribbean by the daily headlines.

Obviously there are two camps in this issue. The bullish one says the crisis will soon be over and business will return to normal.

The bear thesis is that the crisis will not end for a long time – and these companies will go out of business. Neither theories are likely to be entirely correct.

When Royal Caribbean was dealt on the show on Friday it was in the mid $ 52 trade, slightly red for the session.

Without trying to guess the next headline for the topic, the author of this article encouraged investors to watch the price move near Wednesday’s low of $ 51.35.

The thought is that if Royal Caribbean could hold this level, maybe the street would shake off the bad news and set the stage for a rally.

After a lower opening price on Friday, the stock continued in that direction but found buyers before that low and hit just $ 51.35.

On the last review, Royal Caribbean rose as high as $ 54.27 and traded 1.67% to $ 53.04.

Photo from Pixabay.