The primary driver behind the decline of Carnival Corp can be attributed to rising global crude oil prices, which directly translate to higher fuel costs. Due to the fact that Carnival does not typically hedge its fuel, it is highly sensitive to price increases that compress profit margins.
Geopolitical Disruption in Europe: Persistent geopolitical volatility, specifically the ongoing conflict in the Middle East, has heavily impacted travel demand and delayed booking decisions for deployments in the Mediterranean region.
The technical outlook looks bleak, but at the same time currently oversold with the 14 day relative strength index at 26%. The current price of $27.47 is below the falling 200 day moving average of $27.74. The Fibonacci 38.2% retracement level from the high, based on the entire $34.03 to $6.15 range traded since October 2022 is $23.37. Strong support can be expected at $20.09 which is the Fibonacci 50% retracement level of the same range. The current oversold state could result in a retracement towards the 200 day moving average at $27.74.
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