SeaWorld Entertainment, Inc. (SEAS) shares rose more than 5% during Tuesday's session after Credit Suisse upgraded the stock to Outperform with a price target of $30 per share.

Key Takeaways

  • SeaWorld shares moved sharply higher during Tuesday's session after Credit Suisse upgraded the stock to Outperform with a $30 price target.
  • The analyst sees ongoing reopenings and travel trends as a catalyst for the stock given its year-round presence in California and Florida.
  • The move also comes after the company announced progress on its first park located outside of the United States in Abu Dhabi, UAE.

Analyst Benjamin Chaiken believes that SeaWorld is well positioned to benefit from increasingly loose travel restrictions in California and Florida, where it operates largely year-round parks. While Orlando has been lagging in recent months, the analyst believes that the trend is well understood by investors and that there is potential for positive momentum from reopenings. There may also be an opportunity for cost savings ahead.

Earlier this week, SeaWorld also announced progress on its first park located outside of the United States. SeaWorld Abu Dhabi is nearly half complete and will be home to the UAE's first dedicated marine research, rehabilitation, and return center, featuring purpose-built habitats and ecosystems that will house different species together. The project represents the first new park in over 30 years and the first located outside of North America.

Chart showing the share price performance of SeaWorld Entertainment, Inc. (SEAS)
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From a technical standpoint, SeaWorld stock broke out from its 200-day moving average at $20.51 to retest its reaction highs of around $22.36. The relative strength index (RSI) swung higher but remains below overbought levels with a reading of 62.16, while the moving average convergence divergence (MACD) could see a bullish crossover in the near term. These indicators suggest that the stock could have room to run over the coming sessions.

Tip

A moving average (MA) is a stock indicator that is commonly used in technical analysis. The reason for calculating the moving average of a stock is to help smooth out the price data by creating a constantly updated average price.

Traders should watch for a breakout from prior highs toward trendline resistance at around $22.00 or Fibonacci resistance at around $25.43. If the stock moves lower, traders could see support near the 50- and 200-day moving averages at $19.25 and $20.51, respectively. A breakdown from these levels could lead to a retest of trendline support at around $19.25.

The Bottom Line

SeaWorld shares moved sharply higher during Tuesday's session after Credit Suisse upgraded the stock to Outperform with a $30 price target. With technical indicators suggesting that there's more room to run, traders should watch key support and resistance levels over the coming sessions.

The author holds no position in the stock(s) mentioned except through passively managed index funds.