Premium Earnings 3-8-12, Opus I

I have had a few questions about Carnival Corporation, $CCL, that also reports tomorrow morning.

Carnival Corporation, $CCL

Carnival Corporation, $CCL, has has been consolidating in a broad double bottom near 29 since the middle of January. Resistance is found at 32 and 33.45 followed by 34.11 and 35. Support is at 30 and 29.10 followed by 28.50. The Relative Strength Index (RSI) is bearish but trying to move higher while the Moving Average Convergence Divergence (MACD) indicator is positive and slowly growing. This chart has a neutral bias. The reaction to the last 6 earnings reports has been a move of about 3.3% on average or $1.02 making for an expected range of 29.85 to 31.90. The at-the money March Straddles imply a larger move of $2.25 by Expiry next week. Implied volatility at 60% is high compared to the historical at 28%, and the April options at 39%. Options activity is heavily favoring the upside calls today.

Trade Idea 1: Sell the March 29/32 Strangle for 65 cents.

Trade Idea 2: Buy the March 32/33 Call Spreads for 35 cents.

Trade Idea 3: Buy the March 31/32/33 Call Call Butterfly for 35 cents.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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