The Carnival share price is under intense pressure as the number of breakthrough Covid cases rise and after a new lawsuit filed against the company. The CCL stock is trading at 1,585p, which is slightly above this month’s low of 1,262p.
The number of coronavirus cases in most countries is rising at a relatively faster rate even as countries intensify their vaccination drives. For example, while the US has vaccinated millions of people, the average number of daily infections has jumped to more than 88,000.
The same trend is happening in other key countries like Australia, New Zealand, and in the European Union. As a result, with the risks of transmission in cruise lines being substantially high, the company will likely see slow demand in the near term.
At the same time, the Carnival share price will react to a new lawsuit filed in the US. The lawsuit alleges that the company failed to make efforts to protect customers from Covid last year. The suit adds that Dr Nadia Nair, the senior doctor at the ship, repeatedly warned management of flu-like cases among customers.
The lawsuit adds that the company did not respond to the warnings by the doctor, which helped spread the disease. The suit has been brought by about 50 of the customer who travelled on the Princess ship. The suit added:
“Before this pandemic started, Carnival knew its cruise ships were at seriously increased risk for spreading deadly contagious diseases. As we alleged in our lawsuits, Carnival ignored obvious warning signs that it was putting its passengers at risk,”
The outcome of the suit could cost Carnival millions of dollars at a time when its business is haemorrhaging money. Still, the firm could defend itself citing limited information about Covid.
The daily chart shows that the CCL share price has been in a tight range recently. It is trading at 1,585p, which was slightly above the key support at 1,262p. The price is slightly below the 38.2% Fibonacci retracement level. It is also at the same level as the 25-day and 50-day exponential moving averages (EMA).
Notably, the stock is stil below the lower side of the rising wedge pattern. Therefore, the overall outlook of the stock is bearish, with the next key level to watch being 1,313p, which is along the 23.6% retracement level.