Professor’s Comments September 11, 2013 RCL

Posted by OMS  at September 11th, 2013

One of the stocks that you might want to keep your eye on during the next few days is Royal Caribbean, RCL.

With a peaceful solution to the Syrian crisis on the horizon, boomers will start booing trips to the Greek Islands, Ephesus, Crete, and Haifa within the next few weeks. Trust me on this. These are some of the most beautiful places on the Planet. And now that there are 6 US Navy Warships and several Ruskies in the area, things couldn’t be more secure. If I were a cruise ship captain, I would love to be sailing in this environment.

One of the things you should know about Navy people. They talk to each other. And they talk frequently. While the politicians in Washington sometimes have problems in this are, Navy folks always talk. It’s important for Navy captains to always know the other guys intentions. For one thing, they don’t want to run into each other. So they always want to know who’s in the area, where’s he’s going, and IF he’s planning on doing something that could be considered aggressive behavior. When you have missiles on board, you don’t want to start an international incident. There is no room for error. So you talk.

And when the Russians and the US Navy are talking and operating together, cruise ship captains couldn’t feel safer. So the passengers will return.

The past few weeks have depressed cruise line prices, and RCL has fallen from 39 to 35. That’s not much of a decline. In the process, the stock has formed a classic Hockey Stick. If it starts to turn positive, the ‘stick’ projects to the 43 area.

But here’s the thing I really like about RCL. If you take a look at the monthly chart, it’s pretty clear that RCL has been forming a major triangle pattern for the past 13 years. All five waves are present, with a classic truncating ‘e’ wave. If this is the case, RCL could be a nice place to be for years and years.

I know that I have absolutely no intention of changing my cruising plans. And I do not see any reason why any other Boomer would NOT want to take advantage of these low cost-high value vacations.

And now with a stock price near 38, I believe RCL is on sale. The stock recently dropped off the Dean’s List, but in a pre-market run, it’s back on at the bottom.

So If the PT indicators turn positive today, I’m a buyer.

This will be part of my Basic Position.

That’s what I’m doing,

h

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ

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