Consumer discretionary stocks performed well on Monday as investors focused their eyes on the impact of lower interest rates.
The yield on Ten Year Treasuries ($TNX) dropped on Monday with just two weeks left before the last FOMC meeting on interest rates. The move suggests that the Fed will lower rates one more time before the end of 2024, a move that would be good for consumers in 2025.
At the same time, headlines surrounding the travel industry have been positive after the busiest travel weekend to date went off without a hitch.
The combination of improved consumer confidence and increased travels is playing out bullishly for the cruise line industry, notably Norwegian Cruise Line (NCLH).
In October, Norwegian Cruise Lines released its latest earnings results.
The results showed improved fundamentals as Norwegian beat its earnings per share target by $0.05. The earnings surprise was driven by stronger revenue growth that also beat analyst expectations.
For the quarter, Norwegian grew revenue by 10.7% compared to last year’s quarter.
Shares have rallied 20% since that earnings report but appear set to break into a new short-term bullish breakout.
After consolidating between $25 and $27.50 for the last month, shares of Norwegian Cruise lines are breaking into a volatility rally. That rally signaled NCLH shares moving above their top Bollinger Band.
Bollinger Bands are a technical tool used to measure a stock’s potential for fast and aggressive moves.
The last similar move for NCLH shares happened in early November ahead of a 11% rally to its current price of $27.50.
In addition to its short-term bullish setup, Norwegian Cruise Lines shares maintain a long-term bullish outlook with a price target of $33.
