Cineworld share price has been in a consolidation phase in the past few days as investors focus on the company’s future after it filed for bankruptcy recently. The stock was trading at 2.85p on Monday as the market refocused on the upcoming earnings scheduled for Friday. It has crashed by more than 90% this year.
Cineworld earnings ahead
Cineworld, the bankrupt cinema chain, has come under intense pressure in the past few months. Demand for its services has crashed recently as the blockbuster movie industry fizzled. According to BoxOffice, the industry generated less than $100 million in each of the last five weeks of the summer season. This happened as top movies like Top Gun, Minions, and Jurassic performed well this year.
Therefore, Cineworld announced that it expected that the industry will bounce back in the fourth quarter. Still, with very few blockbuster movies expected, there is a likelihood that the industry will continue underperforming in the coming months. There are only four major movies scheduled for later this year: Black Adam, Black Panther, Strange World, and Avatar. This explains why similar stocks like AMC and Cinemark crashed.
Cineworld share price will have a big week as the company publishes its results on Friday. Analysts expect that the firm will publish weak results. Still, they will also focus on the ongoing bankruptcy proceedings and how the firm plans to spend its recently raised cash. The company still faces litigation about its Cinemark acquisition and a mountain of debt. In total, the company has over $5 billion in debt compared to an equity valuation of just 40 million pounds.
Cineworld share price forecast
The daily chart shows that the Cineworld share price has been in a strong bearish trend in the past few months. Along the way, the stock has managed to move below all moving averages while the MACD has formed a bullish divergence pattern. It has also formed a pattern that looks like a bearish flag pattern.
Therefore, there is a high chance that the stock will crash to a low of 1.86p, which was the lowest level this year. A move above the resistance point at 4p will invalidate the bearish view.