As cruise stocks recover, two traders agree this is the best bet in the group $RCL $CCL $NCLH (via TradingNation)
At Wednesday's close, Carnival was up over 2.5%, Royal Caribbean was up nearly 4% and Norwegian Cruise Line was up 3%. Earlier in the day,its earnings per share could take as much as a 65 cent hit in 2020 if the company is forced to halt its operations in Asia.
While Tepper said he wouldn't be a buyer of the cruise stocks just yet — he preferred hotel plays likefor their "strong brand loyalty" and affordability relative to the cruise lines — Norwegian stood out to him as the best bet in its group. Norwegian's chart supported those fundamentals, O'Hara said. The technical analyst added that, historically, cruise stocks' performance in response to negative news like this tends to lead to "a buyable dip."
"If you look at Norwegian versus its peers, it's in the best technical shape. Currently, it's only down 10% from its recent highs versus its peers, which are down closer to 15%," he said. "So, we've lost less and we're actually starting to climb back faster. So, I think if we are ready to dip our toe into the water, Norwegian is the cruise liner to buy here."
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