close icon

COVID-19 De-Risks Royal Caribbean Stock

COVID-19, or the coronavirus as it is commonly known, is taking its toll on the travel industry. Cruise ship operators are among the hardest hit as ports refuse docking to ships with infected passengers on board. The share price of Royal Caribbean Cruises, for example, is down over 52% in less than two months.

The virus is obviously going to cause problems and profit declines for many industries. However, similarly to Zika, SARS, Ebola and all the others before it, COVID-19 is unlikely to bring the doomsday scenario many fear.

Hence, many stocks sold off not because of actual business deterioration, but because investors succumbed to the panic. As the outbreak passes and things normalize, those same stocks should rise again. Besides, the crash in Royal Caribbean seems to fulfill a textbook Elliott Wave pattern. Take a look below.

Royal Caribbean stock halves during coronavirus outbreak

RCL’s weekly chart reveals that the uptrend from $5.40 in March 2009 is a five-wave impulse. The pattern is labeled (1)-(2)-(3)-(4)-(5), where the structure of wave (3) is also visible. A three-wave correction follows every impulse and that is what’s been in progress since January 2018.

Royal Caribbean Opportunity Amid Coronavirus Panic

Royal Caribbean has been a disappointing investment for the past two years. The reason is that a regular (a)-(b)-(c) flat correction has been unfolding. Waves (a) and (b) are simple a-b-c zigzags. The sharp plunge in wave (c) coincided with the coronavirus outbreak.

The decline already reached the support area of wave (4), where corrections often terminate. The theory states that once a correction is over, the larger trend resumes in the direction of the impulsive sequence. If this count is correct, we can expect a bullish reversal soon.

The coronavirus aside, we think Royal Caribbean stock carries a lot less risk now than two months ago. The stock’s halving looks like an investment opportunity. However, make sure you understand the company’s fundamentals, as well.

Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Intel ‘s Troubles Fit in its Elliott Wave Correction

2020 is shaping up as a year to forget for Intel shareholders. The stock is down over 20% year-to-date. First, the coronavirus selloff caused a 35% plunge down to less than $44 a share. And just when it seemed INTC was recovering, the company announced it will delay its 7nm products until late 2022 or…

Read More »

Expedia Stock can Surge as Travel Returns

The coronavirus pandemic hit no other sector harder than travel. Lockdowns took a heavy toll on airlines, hotels and even rental car services as people postponed vacations and business trips were cancelled. Even asset-light companies like Booking and Expedia saw their stock prices plunging. Expedia, which was down 25% from its all-time high even before…

Read More »

Plus500 Confirms Uptrend, but Correction is Likely

Based in Haifa, Israel, Plus500 (LSE:PLUS) operates a leading CFD trading platform. The company is part of the FTSE 250 index and conducts most of its business in Europe and Australia. The new ESMA regulations which came in effect in August 2018 severely impacted the CFD trading industry. As a result, Plus500 stock fell from…

Read More »

Moody’s, a Buffett Darling, Trading in Late Fifth Wave

Moody’s Corp. has been a long-time holding in the Berkshire Hathaway portfolio. It is also the seventh biggest position in it as of the end of March 2020. The company has a strong competitive advantage, it is highly profitable and growing. No wonder Warren Buffett likes it so much. The stock did decline sharply in…

Read More »

Dollar General Stock Bulls are Looking for Trouble

As a general merchandise discount retailer, Dollar General was among the handful of businesses that actually benefited from the pandemic. People piled on necessities preparing for what looked like the end of the world for a while. As a result, sales at Dollar General surged in the midst of the crisis. While its stock price…

Read More »

Veeva Systems Stock Trades in Bubble Territory

It is true that the Fed’s recently re-adopted zero rate policy and stimulus are distorting financial markets. Interest rates are like gravity to financial assets. The lower the rate, the higher asset prices go and vice versa. As a result, stocks in general tend to ignore the economic reality right now. Among the companies trading…

Read More »

PNC Financial Completes Bullish Elliott Wave Cycle

Economic crises have always been especially tough on financial companies. Usually, when the general market is falling, financial stocks are crashing even harder. PNC Financial for example, lost 81.6% in the 2008-9 recession, while the S&P 500 fell by “just” 58%. PNC Financial stock suffered more than the general market during the recent coronavirus selloff,…

Read More »

More analyses