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Cineworld stock price recovers 25% after logging record lows

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Shares of Cineworld Group PLC (LON: CINE) closed the week 24.8% higher after the price action logged record lows below GBX20. The outlook for the stock is all but positive on the back of weak box office results and postponements of major films like “The Batman”, “No Time to Die”, and “Dune”.

Fundamental analysis: Biggest crisis in history

It’s now more than evident that the cinema industry is experiencing the worst crisis in its long history. The world’s second largest cinema chain was forced to shut 663 cinemas as the pandemic continues to create havoc in the cinema industry.

Cineworld admitted this was “not a decision we made lightly” as it puts 45,000 jobs at risk, 5,500 of which are in the UK.

“We did everything in our power to support safe and sustainable reopenings in all of our markets,” said Mr Greidinger.

One of the key drivers behind such a decision is understood to be the lack of big title releases in cinemas since August. On October 05, Warner Bros announced postponements of blockbusters “Dune” and “The Batman.”

“Cineworld will continue to monitor the situation closely and will communicate any future plans to resume operations in these markets at the appropriate time, when key markets have more concrete guidance on their reopening status and, in turn, studios are able to bring their pipeline of major releases back to the big screen,” said Mr Greidinger.

After the postponement of the new James Bond film until April 2021, cinemas ran out of major titles to lure the fans. 

Technical analysis: Shares make modest gains 

Cineworld share price hit an all-time high of GBX15.64 on October 05 after the company announced cinema closures. Still, the stock price nearly doubled in value since then as investors used the opportunity to capitalize on the short-term recovery.

Cineworld stock chart (TradingView)

Shares closed the week at GBX29.68, which is 24.8% higher as the buyers work to push the price action above the GBX30 mark. They now face a confluence of resistance lines that are located between GBX32 and GBX40.

Summary

Cineworld stock price has managed to recover a portion of huge losses it recorded in 2020 as the COVID-19 outbreak continues to create historic disruptions in the cinema industry.

The post Cineworld stock price recovers 25% after logging record lows appeared first on Invezz.

Source: INVEZZ

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