Carnival has been struggling to hold a key support level, and now the bears are positioning for a cruise to the south.
optionMONSTER's Depth Charge tracking system detected the purchase of about 5,800 July 35 puts, mostly for $1.20 to $1.35, against open interest of 2,183 contracts. Most of the activity occurred in the final two hours of trading as the shares sank into the close.
The transactions occurred one day before the company reports earnings, and followed similarly bearish activity in rival cruise-ship operator Royal Caribbean.
CCL fell 1.89 percent to $34.74 yesterday. Strong customer demand and pricing power have driven the stock higher since the March 2009 lows. It reached a 29-month high of $44.21 on April 26, but then reversed along with the rest of the consumer-discretionary sector, and proceeded to lose 21 percent of its value since that time.
CCL is now struggling to hold the key $34.50-$35 level that served as resistance late last year and is just below the key 200-day moving average (purple line on chart).
Yesterday's put buying was less bearish than Friday's activity in RCL because the CCL traders used in-the-money contracts, which indicates they're positioning for a smaller potential drop.
Overall options volume in CCL was nine times greater than average in the session.
(Chart courtesy of tradeMONSTER)
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