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Chart of the Week: Carnival

Written By Brian Hicks

Posted January 24, 2012

Four days ago we bought oversold call options on Carnival (CCL:NYSE) in our options program, as Captain Coward was led away in shackles. The stock had breached its lower Bollinger Band. W%R was sitting at oversold levels. And volume was coming back strong, despite a sinking ship.

A day later, the stock bounced $1.40. And we walked away with 34% gains.

And today, it’s up another 34 cents… even as the markets show signs of breaking down.

CCL chart 012312

But that’s not the only opportunity we’ve had our sights on.

Notice that every single time the VIX closes below its lower Bollinger Band – which it just did again – it has a tendency to pop. I’d love to see a bottom for the VIX here and a decline in the overbought, over-extended market on this latest move.

(Chart from

VIXchart 012312