Friday wasn't just another down day… it was a resolution. The S&P 500, Dow Jones Industrial Average, and Nasdaq 100 resolved massive tops. Across the board, risk assets are under pressure. And when the tape looks like that, it doesn't matter how good your numbers are… You're getting sold. That's exactly what we saw with Carnival Corporation $CCL On the surface, this was a solid quarter. The company posted a clean double beat, with revenue coming in at $6.17B versus expectations of $6.14B, and earnings per share printing $0.20 against estimates of $0.18. Profitability continues to improve, with net income swinging to $258M from a loss last year. So fundamentally, things are moving in the right direction. But price tells a different story. |
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*Click the image to enlarge it Despite the strong results, CCL closed down -4.3% on the session… marking its worst earnings reaction in the past 11 quarters. That's not what you want to see. Now, to be fair, context matters. Our reaction score came in slightly positive at 0.08, which means the selloff wasn't as severe relative to the broader market environment and the strength of the results. In other words, this wasn't an outright rejection. But it wasn't acceptance either. And that's the key. Because when stocks are in strong uptrends, good news gets rewarded. When they're not… Even great quarters get sold. And the chart tells you everything you need to know. |
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Carnival is still stuck beneath a massive level of prior cycle resistance. This is the same area where the stock peaked years ago… and it has been failing there repeatedly since last summer. At the same time, the shorter-term trend is rolling over. Price is below key moving averages, momentum has faded, and the stock is drifting lower within this broader base structure. So yes, the fundamentals are improving. But the market isn't ready to pay for it yet. And until that changes, this is just another stock trapped in a massive base… not one breaking out. Carnival checked all the boxes with this report, but none of it mattered in a weak tape. That's the lesson. Because in this market, it's not just about what companies report… It's about how stocks react. If you want to focus on the names that are getting rewarded for reporting earnings, check out the work we're doing for Premium Beat Report members and consider joining our growing community. Stay safe out there, -The Beat Team |
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STAY HUNGRY. STAY FOOLISH |
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