Cineworld Share Price Could Soon Bounce Back to YTD High

Summary:

In this Cineworld share price forecast, we explain why the CINE share price will soon bounce back because of the falling wedge pattern

The Cineworld share price is in the spotlight after a series of positive news by the company. The shares opened at 89.5p in London, higher than Friday’s close of 86.82p. It is still up by more than 50% in the

Cineworld news: Cineworld is the biggest theatre chain in the United Kingdom with hundreds of stores. It also has a strong presence in the United States where it owns brands like Regal Cinemas. In total, the company has operations in 10 countries like Poland, Slovakia, and Bulgaria, among others.

Cineworld and AMC, its competitor, were among the most affected companies by the pandemic since they were forced to close their locations. Their share prices have recovered recently as investors price in a quick recovery because of the vaccine.

Today, the Cineworld share price is reacting to encouraging results by the company. In an update, the firm said that 97% of its locations in the United States have already reopened.

The firm also hailed the strong demand of its services as fans rushed to watch Peter Rabbit 2: The Runaway. It also expects that there will be more demand the following weekend after the release of Cruella and A Quiet Place 2. Most importantly, it said that it had received $203 under the US CARES Act. The management said:

“We are thrilled to have our cinemas back in business in the US and UK and to welcome movie fans back to the big screen for an exciting and full slate of films.”

Many analysts believe that companies like Cineworld will see robust demand as more people receive vaccinations. Furthermore, these people did not watch as many blockbusters last year during the lockdowns.

Meanwhile, the company has embraced the ongoing demand for gaming. This is after the company announced a new venture that will see it start renting it cinema space for gaming. The company said:

“There’s nothing quite as breath-taking as playing your favorite game in your very own private cinema screen. With this offering, guests can hire out a range of consoles and games, and play all the latest game releases.”

Cineworld share price analysis

The daily chart shows that the Cineworld share price has been struggling in the past few weeks. The stock has declined by more than 35% from its highest level this year. It has also formed what looks like a falling wedge pattern. In technical analysis, this pattern is usually a bullish sign. However, the stock is slightly below the 25-day and 50-day exponential moving averages (EMA), which is a bearish sign.

With the falling wedge pattern nearing its confluence zone, there is a possibility that the stock will soon have a bullish bounce. If this happens, there is a possibility that it will retest the YTD high of 124.5p. However, a drop below the 50% Fibonacci retracement level at 70p will invalidate this trend.