Leisure is a sector of opportunity that the SIA platform has alerted users to via the SIA Stock sector-relative strength (RS) matrix, having just entered the SIA Favored Green Zone this week. The sector’s relative strength has risen 6 spots in the past month and 9 spots in the past quarter, while many of the sector’s components have been rallying within their own respective SIA reports as autumn began. From an absolute return performance perspective, the SIA Leisure Equal Weight Sector Index is up 23.91% in the past quarter and 19.87% year-to-date (YTD), compared to the SIA S&P 100 Equal Weight Index (EWIOEF) returns of 13.10% and 21.79%, respectively, over the same periods. While this relative strength is a recent development, it has built up over time, with internal components like Intercontinental Hotels Group (IHG), Marriott International (MAR), Royal Caribbean Cruises (RCL), Norwegian Cruise Line (NCLH), and several airlines, as well as Booking Holdings, emerging as early RS leaders within their respective indexes. Carnival stands out within the sector, especially in the SIA S&P ADR Index Report, where it currently holds the #1 position in the 126-member report, having rallied 90 positions in the past quarter. Carnival is a dual-listed company, with the Panama-incorporated, U.S.-headquartered Carnival Corporation, and the UK-based Carnival plc functioning as a single entity. Carnival Corporation is listed on the New York Stock Exchange, while Carnival plc is listed on the London Stock Exchange, with an ADR listing on the NYSE. The company operates nine cruise line brands and one cruise experience brand, managing a combined fleet of 91 ships, and is expanding its partnership in China through the Adora Cruises brand (formerly CSSC Carnival Cruise Shipping).
To illustrate the strength of the leisure sector, we’ve included a clipping of the SIA Sector Scope from November 14th. SIA practitioners use this tool to identify sectors based on three key attributes: first, sectors exhibiting growing relative strength (marked in green); second, those with a positive bullish percent reading (in capital letters); and third, sectors that are well-positioned (with the optimal sector level between 57-63%). The leisure sector is marked with a heart in this scope to indicate that it is in the "sweet spot" for current opportunities. After reviewing the SIA Stock Sectors area under the Reports tab, which lists all the stocks in the sector, we can now focus on individual positions. Although there are many names to choose from, CUK has been selected for today’s Daily Stock Report due to its significant relative gains in the SIA S&P ADR Index Report. This move into the SIA Favored Green Zone is highlighted in the attached point-and-figure chart, where we’ve used the matrix position tool for a color-coded overlay. CUK shares have now moved past prior resistance at $17.72, with minimal resistance until the $24.33 level. Currently trading around $22, the chart shows a resistance zone above current levels (circled), with the next key resistance at $27.40. Support is found at the 3-box level of $20.36 and the quad breakout zone at $17.37, with these levels providing parameters for evaluating potential price movement. In addition to its strong sector-relative strength and top position in the SIA ADR Index Report, CUK also holds a perfect SIA SMAX score of 10/10, further supporting its outperformance metrics relative to other asset classes like bonds, commodities, or holding cash.
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