As if the struggling Cineworld share price didn’t have enough on its plate already, CINE must now deal with a foreboding death cross.
Cineworld Group plc (LON: CINE) sagged lower on Wednesday, closing at 61.26p, down 2.04p (-3.22%).
Clearly, the last year and a half have been the most challenging period in history for the Cinema business. This resulted in the Cineworld share price trading as low as 15.64p in March 2020, more than 95% below its 329.42p all-time high.
However, over the last few months, the world’s second-largest cinema chain should have been given a boost by the economic re-openings in many of its key markets. Bur despite this, CINE has halved since May.
The emergence of the Delta-variant Covid strain weighs heavily on Cineworld as the company faces the threat of new lockdowns in the US. Not to mention the rise in streaming services may have changed movie-watchers viewing habits for good.
Disney, Apple and Amazon have all upped their efforts to grab market share over the last year whilst cinemas have remained largely vacant. Furthermore, the disappearance of the three-month monopoly window on new releases could prove fatal.
Considering Disney has produced some of the highest-grossing movies in the last few years, theatres will sorely miss their blockbusters. Previously, studios gave cinemas exclusive 90-day access to the latest releases. In their absence, many movies now go straight to streaming.
As a result, CINE has been under continual pressure for the last 5 months. And unfortunately, if the technicals are to be believed, the outlook is turning even more negative.
CINE Technical Outlook
The daily chart shows that over the last 7 months, the Cineworld share price has remained true to a descending trend channel. And the negative trend will continue to dictate the direction until the price can break above the top end of the pattern at 76.60p. However, this will not be easy. The 50-day moving average at 75.75p and the 200-day at 77.56p combine to make this a robust resistance level.
Furthermore, the 50 DMA has completed a bearish death cross and is below the 200. This typically signals a deterioration in momentum and suggests further weakness ahead. A continuation south targets the lower end of the channel at 48.00p, and following that, the horizontal support at 40.00p.
The bearish outlook remains as long as the price stays below 77.56p. A break above this level invalidates the negative view and suggests CINE may break higher.
Cineworld Share Price Chart (Daily)
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