PreMarket Prep Stock Of The Day: Norwegian Cruise Line

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

All rotations in the markets come to a pause or eventually reverse. The wicked rotation out of growth stocks and into value and “re-opening stocks” that has been so prevalent over the last few weeks may be changing.

Not that growth stocks are immediately coming back into vogue, but there is some profit-taking in the cruise line sector. With that being said, Norwegian Cruise Line Holdings Ltd NCLH is the PreMarket Prep Stock Of The Day,

Fall From Grace: Norweigan made its all-time high in October 2015 at $64.10. However, it was hovering just below that area when it peaked in January 2020 at $59.73 and backed off to end the month at $53.85.

When the market went into freefall in March, it was one of the hardest-hit issues along with others in the sector. While the S&P 500 index shed 35% from peak to trough, the issue sank 88%. It finally bottomed in March at $7.03, which exceeded its IPO low from January 2013 ($24.16) by a wide margin.

Righting The Ship: The issue was able to double off that depressed level, when it roared to $26.91 in early June but backed off to end the month at $16.43. In August it had a retreat to $12.56 but was back at its June level in October when it ended the month at $16.63.

Flooded With Buyers On The First Vaccine Monday: After ending its Friday, Nov. 6 session at $16.97, the issue leaped to $21.51 the following session upon the announcement that Pfizer Inc. PFE had developed an effective vaccine for COVID-19.

It retreated from that level, but went no lower than $18.61 a few days later and resumed its move higher. The momentum carried into the remainder of the year, as it ended 2020 at $25.43.

Choppy Waters In 2021: In Thursday’s session, Norweigan reached its highest level since February ($37.10), when it peaked at $34.49 and retreated to end the session at $32.90. The selling has accelerated in a more pronounced way in Friday’s session.

After a lower open, it could not even get to the lower-end of Thursday’s session ($30.96), only reaching $30.37 and began to sink. As of 12:45 p.m. ET, it declined to $26.65 and has rebounded into the upper $28 handle.

Moving Forward: Although the issue has backed off over $7 from its recent high, there are still plenty of investors sitting on huge profits since the March low. Since it may be hard for the issue to get back to $34.48 quickly, the whole number of $30 may attract some sellers, especially since it's in the area of Friday’s high. If looking for more but not the top, the high close for the move was on Wednesday at $33.13 and that was flanked by Thursday’s close of $32.90.

If looking to exit on weakness, there are pockets of daily support points at $23 and $24 areas, however, based on the monthly charts until the pair of monthly lows at the $22 level.