RCL breaks below Thursday's low
Royal Caribbean Cruises Ltd. (RCL) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, RCL ended the month -3.16% lower at 48.71 after losing $1.59 (-3.16%) today, significantly underperforming the S&P 500 (0.77%). Closing below Thursday's low at 49.10, the stock confirmed its breakout through the previous session low after trading up to $1.22 below it intraday.
Daily Candlestick Chart (RCL as at Jul 31, 2020):
Friday's trading range has been $2.42 (4.84%), that's slightly below the last trading month's daily average range of $2.99. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RCL.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 49.40 (now R1), which is likely to act as resistance going forward. The last time this happened on Monday, RCL actually gained 3.10% on the following trading day.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 51.99 where further buy stops might get triggered. Further selling could move prices lower should the market test June's close-by low at 45.06.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Royal Caribbean. Out of 540 times, RCL closed higher 51.48% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.37% with an average market move of 0.53%.