Ready to Cruise Higher? This Stock Might Be

There are some stocks, especially given the cyclical bear market that we've endured, that simply look like they'll never go up. Carnival Corp (CCL) definitely fits the bill.

The price action has been abysmal, its SCTR rank is 1.7 (near the very bottom in terms of relative strength), volume trends are awful, the AD line suggests distribution, its industry group is one of the worst, and it's downtrending vs. that weak industry group. Here's what I'm talking about:

Enter Carnival Corp (CCL):

There are 3 things I like, however, in the very near-term. There are no guarantees of any stock moving higher at a given point in time, but CCL has 3 bullish features I want to discuss.

First is the positive divergence in play. As prices have moved lower in July, the PPO has turned higher, suggesting slowing price momentum to the downside. Its AD line has also improved despite the price weakness and that suggests possible accumulation. Second, yesterday's volume was solid and accompanied a reversing candle (bullish engulfing). Finally, and this is really a very short-term positive, "max pain" on CCL is at 12.92, nearly 42% higher than Tuesday's close.

What does this mean?

• The SCTR score can help us identify improving stocks, but there's still plenty of work to be done to confirm that improving relative action.

Happy Trading! Tom Bowley Chief Market Strategist EarningsBeats.com Better Timing. Better Trades.