The Cineworld share price popped on Tuesday as the overall fear of the Covid pandemic waned. The CINE stock popped by more than 5% and ended the day at 66.2p, which was the highest level since August 12. Other movie theatre stocks like AMC and Cinemark have also rallied recently.
Why CINE shares popped
Last week travel and companies exposed to the coronavirus pandemic struggled as investors continued to worry about the Delta variant. The situation worsened after countries like New Zealand, China, and Australia announced fresh lockdowns to stop the pandemic.
This week, however, this fear has waned as investors remain optimistic that countries will respond better to the new outbreak. A full authorization of the Pfizer and BioNTech vaccine also helped to fuel the rally. Indeed, the price of crude oil has popped while companies associated with the travel and leisure market have popped. On Tuesday, stocks like Rolls-Royce, IAG, and Intercontinental Hotels were among the best performers in the FTSE 100.
The Cineworld share price rallied because of this. In addition, the company is rising as investors wait for more details about the company’s planned listing in New York. When announcing its half-year results, the company said that it was considering listing its Regal Cinemas business in New York. It cited the need to boost its balance sheet and the deep liquidity in the country.
Also, investors are looking ahead to a slate of cinemas scheduled for later this year. Some of the blockbuster films that will be released later this year are No Time to Die, Ghostbusters, and Top Gun. The three films are by MGM, Sony, and Paramount, respectively.
Still, the biggest concern for the company is that all these companies are trying to push their digital subscriptions. A few weeks ago, Disney recorded strong digital subscriptions for its Black Widow film. If the trend continues, these firms could release these blockbusters in their digital platforms entirely.
Cineworld share price forecast
Turning to the hourly chart, we see that the CINE share price formed a strong support at 60.92p. It struggled moving below this level several times this month. At the same time, the shares managed to move above the upper side of the descending trendline. It also rose above the 20-period and 50-period volume-weighted moving average (VWMA).
Therefore, if the bullish breakout continues, the next key resistance level to watch will be at 71p, which was the highest level on July 22. The stop-loss for this trade will be at about 62p.