There’s Still Time to Short These Sinking Cruise Stocks
Cruise stocks are starting to sink—and fast.
Amid rising geopolitical tension between Israel and Iran, there’s growing fear that conflict in the Middle East could spiral into something far worse. And when fear enters the market, discretionary travel stocks like airlines and cruises are often among the first to take the hit.
That’s especially true when oil prices are surging.
Crude just popped higher on renewed uncertainty over the Iran nuclear deal, following direct threats of military retaliation. U.S. Gen. Michael Kurilla confirmed that strike plans have already been presented to the White House, and Iran has responded by threatening to target American bases if provoked.
Naturally, oil prices soared. And when oil rises, cruise lines feel the pain on two fronts: rising fuel costs and falling consumer demand.
It’s no surprise, then, that cruise stocks are now reversing sharply—and we think they have much further to fall.
Let’s take a closer look.
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Company: Royal Caribbean (SYM: RCL) For a while, the party was raging aboard Royal Caribbean. The company posted strong earnings. Consumer demand for cruises surged. And the stock ripped higher—rising from a low of $165 in April to a peak of nearly $290 in early June. That’s a stunning gain of more than 75% in just two months. But then came the hangover. As we warned earlier, this run was fueled by greed more than fundamentals. RCL became technically overbought across the board. Take a look at the chart:
Last trading at $257.90, RCL is now rolling over. If this selloff accelerates, we believe shares could fall back to $230, an area that acted as support in April and May. If that floor breaks, the next stop might be $210 or even the 200-day moving average near $195. Until geopolitical tensions ease and oil prices stabilize, shorting RCL—or at the very least, staying away—is the more prudent play. |
Investors Alley
The check disappears. Then the damage hits.
They’re not going to tell you before it happens. Not the Fed. Not your broker. The next cut will come in silence—just like the last ones. No dividend. No reason. No backup plan. And by the time you notice? The damage is already done. Rate cuts, soft landings, happy earnings. But what happens when that fantasy cracks? If you’re holding the wrong stocks when it does… The check disappears. And so does your income. I’ve laid out a way to fix that—right now—before the next leg down.
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Company: Carnival Corp. (SYM: CCL) Carnival shares also ran too far, too fast. From mid-April to early June, CCL soared from roughly $15 to $24.66—a gain of more than 60%. But just like RCL, the rally left it overbought and vulnerable to any negative headlines. Now those headlines are here. Carnival has already pulled back to $22.26 and looks poised to test more downside. Technically:
CCL may look “cheap” on the surface, but with volatility rising, it could easily get cheaper. |
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Company: Norwegian Cruise Line (SYM: NCLH) NCLH didn’t participate in the rally with the same gusto as RCL or CCL, which could be a red flag in itself. After rising from around $15 in April to a high near $21.60 in late May, the stock has already retraced below $19. Technically, this stock has been showing relative weakness for weeks.
Among the three cruise names, Norwegian may be the most vulnerable to further selling—especially if geopolitical tensions worsen and discretionary travel gets cut from consumer budgets. The Big Picture: Why We’re Still BearishLet’s zoom out for a moment. Even if oil prices stabilize temporarily, the risk of a prolonged conflict in the Middle East still hangs over markets. With the U.S. pre-positioning forces and Iran threatening retaliation, this situation could escalate at any moment. For cruise operators, that means:
Even with solid earnings and demand metrics, these headwinds are difficult to overcome. And when greed has already taken stocks far above their sustainable levels, the risk/reward profile clearly tilts to the downside. |
