Royal Caribbean Cruises Group (RCL) Breaks Down Channel

Royal Caribbean Cruises Group (RCL) operates as a global cruise company. It controls and operates the following global cruise brands: Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises.

Take a look at the 1-year chart of RCL below with my added notations…

RCL had formed a down trending channel over the last three months. A channel is formed simply through the combination of a trend line support that runs parallel to a trend line resistance.  Any (3) points can start a channel, but it’s the 4th test and beyond that confirm it. RCL broke channel resistance yesterday, which should lead to overall higher prices for the stock.

 A long trade could be entered on a pullback down to the prior channel resistance, which currently sits near $90. A short trade might also be made if the stock falls back inside the channel.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!

Christian Tharp, CMT