This cruise stock is forming a potential ‘cup-and-handle’ chart pattern
When we hear about consumer discretionary, we typically think of the biggest names — Amazon and Tesla , which of course dominate the State Street Cons Disc Sel Sect SPDR Income ETF (XLY) and account for nearly 40% of the sector. But overall, it has more than 70 components, some of which have been doing well and are showing attractive patterns. One of them is Carnival (CCL) . The stock ripped higher from April 2025 through August 2025, gaining nearly 120% over that stretch. Since then, it has been net flat, though that came after enduring a 25% drawdown into the November low. After snapping back once more, CCL now has formed a large potential cup-and-handle pattern, displayed here on its weekly chart. This formation is taking shape above its rising 40-week moving average, which roughly lines up with the 200-day line. A move through the 33-breakout zone would create an upside measured-move target near 41. From a shorter-term perspective, a recommended stop loss would sit near the handle of the pattern, which comes into play around 27.5. Seeing a bullish pattern form over multiple months is nothing new for CCL, going back to early 2022. In fact, there have been three prior setups, each followed by strong breakouts, upside follow-through, and eventual achievement of their measured-move targets. From this perspective, simply following the same blueprint that has worked during the stock’s comeback over the last few years could yield a similar result. Of course, every time is different. But as we often say, stocks have personalities. When we identify behavior that consistently rewards breakout momentum and provides solid upside follow-through, it’s something investors should take seriously. CCL has clearly been one of those stocks, and thus this current bullish formation could represent the fourth major bullish pattern breakout over the last three-plus years. Zooming even further back, we’ll recall that CCL had been a leader through early 2018, when it reached its last all-time high near 72. Profit-taking began shortly thereafter, with the stock ultimately being among the hardest hit during the Covid crash, plunging below 10 before finally stabilizing. The next drawdown from 2021 through late 2022 forced the stock to undercut its COVID low, marking a final capitulation phase before the current rebuilding process began. Looking at all of this price action together, we can see that a sustained move higher now would also trigger a much larger base breakout encompassing the structure from all the way back to the start of 2020. Thus, a successful breakout here would represent not just a shorter-term pattern resolution, but potentially the completion of a multi-year basing process, significantly expanding the longer-term upside potential. — Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
<
