Cineworld share price is on course for a positive end to the first quarter of the year today. The CINE stock has been in the green for three consecutive days, jumping more than 31% in the past week. Despite the recent bullish momentum, the stock has slipped nearly 12% in the year to date. The company’s market cap has crashed to £37.26 million over time.
Cineworld Group is a British cinema company based in London and the world’s second-largest cinema chain after AMC. The cinema chain operates in 10 countries, including the United States and the United Kingdom.
Cineworld share price has experienced substantial volatility over the past few months, following the company’s filing for bankruptcy last year. Cineworld filed for bankruptcy in September 2022 in a bid to tame its $5 billion debt pile. The company’s valuation has crashed by 88% since hitting trouble last year.
However, according to a report by Bloomberg, the cinema chain is set to publicly file its bankruptcy exit plan and its restructuring support agreement with creditors. The restructuring deal with the company’s lenders will allow it to wipe billions of debts from its balance sheet.
Earlier this week, Cineworld Group announced that it had received a bid from activist investor Elliot Management for the cinema chain’s Eastern European and Israeli operations. However, just like most bids, the company’s operations in the UK and the US were not part of the deal. The Cineworld share price reacted positively to the news, jumping 9.57%.
Despite the recent surge, the company’s rally could be another dead-cat bounce as the company is yet to receive an all-cash bid for its operations in the UK and the US, its major markets. Bidders seem uninterested in the UK and US units.
Cineworld Share Price Outlook
The 4-hour chart shows that the Cineworld share price has been on its journey to recovery for the past few days. The stock is hovering slightly above the 25-day and 50-day moving averages, while its Relative Strength Index (RSI) has moved higher to the neutral zone. It has also moved above and below the 50-day and 200-day exponential moving averages, respectively.
At press time, the CINE stock price was trading 7.15% higher at 2.907p. The stock is likely to extend its bull run in the short term as buyers target the resistance level at 3.485p. However, a move below the important support at 2.530p will invalidate the cautiously bullish thesis.