The Carnival share price was in the red earlier on Tuesday. The stock declined more than 2%, ranking it among the worst performers in the FTSE 250 index. The company has a total market capitalization of $26.73 billion.
Carnival Corporation is the largest cruise line operator in the world. It is closely followed by the Royal Caribbean Cruises and Norwegian Cruise Line. It is the only company in the world to be included in the S&P 500 index in the US and FTSE 250 index in the UK.
The travel sector was among the heaviest hit sectors by the coronavirus pandemic. With the resurgence of the coronavirus later in 2021, alongside the highly contagious Delta variant, Carnival was forced to halt most of its travel.
Since the gradual reopening of the economy, the company has been on a bumpy ride. According to the Financial Times on Monday, 50 Carnival passengers have filed a class action lawsuit against the company. The company was accused of failing to protect its passengers from Covid-19 on a recent cruise.
According to reports, 100 passengers on the Carnival Grand Princess cruise liner, alongside some crew members, tested positive for the virus. Two passengers also died due to the disease. The cruise liner had been denied entry to San Francisco earlier in the pandemic before the CDC banned further cruising.
Investors remain uncertain about the path of the Carnival share price amid its pending lawsuit.
On the four-hour chart, the Carnival share price is trading lower at $1551p. The stock has formed an ascending channel which is usually a bearish indicator. It is trading nearly 60% below its highest point in 2020.
It is trading slightly above the 25 and 50-day exponential moving averages. It is also trading below the 50-day moving average.
The CCL stock is likely to edge lower in the next few weeks as bears eye the key support at $1262p. However, this view will be invalidated if the price moves past $1600p.