Cineworld Share Price Analysis As Trend Continues to Look Bullish

Today’s trading session has Cineworld’s share price up by 2 per cent, further proving the current price recovery may be a reversal after a long-term aggressive push to the downside. The price increase also follows days of consecutive bullish moves to the upside. 

The British cinema company has made small strides in recovering to its pre-pandemic revenue level. Today, the company has a market capitalization of £317m. The company’s financial recovery has also been on the upwards. 

Cineworld has continued to face its challenges, including investors who had accused the company of underpaying them when they bought the Regal Cinemas. The company is also facing another huge lawsuit from a company it wanted to buy for $2.1 billion in 2019. To put it into context, the current phase of the court proceeding shows that Cineplex was awarded $1 billion, which Cineworld is currently contesting in court. 

Cineworld Share Price Analysis

Cineworld fundamentals paint a dire need for the company’s need for more investments. However, the winning of Cineplex in its lawsuit against the company was also a stern reminder of some of the company’s problems. For instance, if Cineworld loses its appeal on Cineplex’s $1 billion award, the company will be declaring bankruptcy. Part of the reason is the company is already in huge debt, and it is also down by 27 per cent year-to-date and over 60 per cent in the past year, showing its continued struggle in the markets. 

Looking at the chart below, we can see prices have gone up by over 40 per cent since July 18, a sign of recovery. Based on the charts and technical analysis alone, my Cineworld price forecast expects the trade to the upside to continue. As a result, we are highly likely to see Cineworld share price trading above the 29 price level in the next few trading sessions. 

Unfortunately, the past few years have seen Cineworld share price trading become very volatile and highly unpredictable to the fast-moving news cycle. Therefore, despite my high optimism based on technical analysis, I remain cautious of the company, especially with the rising debts and ongoing litigations. Therefore, for the long-term, my Cineworld share price forecast is still on the downside. 

Cineworld Daily Chart