UK Cinema company Cineworld expects to reopen its entire chain of cinemas in July, and this is causing the Cineworld share price to soar on the London Stock Exchange. Cineworld is currently trading at 3-week highs after jumping 57.85% from its May 18 lows. The Cineworld share price fell to multi-year lows in March 2020 as governments around the world shut down public spots (including cinemas) as a result of the coronavirus pandemic.
Cineworld share price is also enjoying a boost after the company got approval to access a $45million lifeline from the coronavirus borrowing package in the UK. It also plans to obtain an extra $25 million from the funding window of the US government’s CARES Act, all of which will provide crucial bridge financing for a company that is presently riddled with a $3.5 billion debt burden.
Cineworld is the second-largest cinema chain in the world and has also agreed on the terms of an increase in its revolving credit facility, which would see it receive $110m in additional financing.
Cineworld is currently trading at 94.00, after touching off intraday highs at 102.98. The downside move on the bounced off support at 90.30 before recovering slightly to present levels. A trendline connects the lows of the stock for the past seven days. A breakdown of the 90.30 support and the ascending trendline allows 77.20 to come into focus. 69.34 and 52.64 remain viable support targets in a stock which is seeing substantial intraday moves.
On the flip side, price advance could follow a break of 100.30, which is the resistance formed by yesterday’s highs as well as the historical peak of March 11 2020. Only a break of this resistance will allow Cineworld share price to advance towards 126.50 and 137.28; both multi-year that are marked by the lows of April 1, 2014, and a cluster of lows from July to November 2014, respectively.