Royal Caribbean (RCL) is set to report earnings tomorrow after the close. Key factors and historical patterns suggest a potential bearish move:

• RCL has momentum, with gains from the prior week continuing into the following day.

• Short interest is a key indicator—when it rises, the stock tends to sell off.

• Short interest is up slightly, and the stock is down 3%.

• Both signals point bearish.

Longer term, the stock has surged, while short interest has dropped as short sellers covered their positions during the rally, following a momentum strategy.

Historical momentum and rising short interest suggest RCL could face selling pressure after earnings. While the stock has performed well longer term, the current setup indicates cautious positioning is warranted.

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