Update: 11-25-2013

Signal:  EXIT SHORT

The algorithm has exited the CCL short position and today’s price action confirms the move.  We are seeing heavy buying in CCL at the open today and the stock failed to break down below $36 which was the low of the day.    As we stated yesterday:

Carnival Cruise Lines stock is a laggard in the cruise industry given the ongoing problems with its fleet.  The other cruise line stocks are leaders given industry fundamentals, however in most cases many of the stocks are over valued.   While we believe further declines in CCL are likely given the historical trading patterns, it appears that CCL could be a candidate for a hedged pairs trade, which means any large fund wishing to invest in the industry may buy CCL while shorting its over valued peers.  _

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This scenario appears to be playing out, which may result in a short squeeze.  After seeing the trade up 2% we exit the trade for a loss of 0.94%.

-Intellikon

 

 

Update:  11-22-2013

Signal: Continue Short, tighten stop

Stop: Now 36.52 (was 37.26)

Carnival Cruise Lines stock is a laggard in the cruise industry given the ongoing problems with its fleet.  The other cruise line stocks are leaders given industry fundamentals, however in most cases many of the stocks are over valued.   While we believe further declines in CCL are likely given the historical trading patterns, it appears that CCL could be a candidate for a hedged pairs trade, which means any large fund wishing to invest in the industry may buy CCL while shorting its over valued peers.    It is for this reason we are tightening the stop on the trade to $36.52 (from 37.26), since if the stock does not decline from $36, then it is very likely that it is being accumulated.

-Intellikon

 

11-18-2013 9:44am  (via email)

Signal: Short

Stop: 37.26

The algorithm generated a Sell signal on CCL (Carnival Corp).  It is currently struggling to break above the $36 handle, which is also slightly above the mean average analyst target price of $35.34.   Adding to the subscriber portfolio as a short.  Additional commentary to follow.