Cineworld: can the shares hit this blockbuster target?

This stock has been popular with short sellers. Are things about to change? Our chartist finds out.

Cineworld (LSE:CINE)  

It's funny, two businesses drastically affected by Covid-19 really depend on bums on seats. 

One, the airline industry, specialises in making posteriors as uncomfortable as possible whereas the other, cinemas, focus on making being trapped in a Petri dish for 150 minutes a comfortable experience. 

With potential Covid-19 vaccines coming along, it's entirely possible these industries shall experience strong share price recovery.

In world of cinema, substantial numbers of blockbuster movies were shelved during lockdown. Hopefully, as immunisations progress during 2021, we shall see people lured to screenings. 

When added to the promise of comfy seats, it's easy to suspect the industry should experience a strong bounce back. 

We're not so sure about airline industry passengers rushing to embrace being stuck in an uncomfortable metal tube for a few hours, and think air travel may take longer to recover.

Unless, of course, the new screening of Fantastic Beasts is included in the price of a ticket to Majorca and passenger comfort is given better focus, especially due to reduced numbers of flyers!

To return to Cineworld (LSE:CINE), for a while it was reputedly one of the most shorted shares out there. 

Despite the company’s share price presently trading miles below its big picture ultimate bottom (165p!), when we last took a hard look at the company, we mentioned a potential bottom ambition of 9p due to its moves during 2020 and lockdown. 

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When the price eventually spiked downward, the lowest achieved was 15p and this perhaps implies some hidden strength. 

As a result, we're going to review some growth potentials thanks to movement since the start of November.

Presently trading around 55p, it looks like movement above 60p should bring recovery toward an initial 80p. 

If opting to play safe, waiting until the share exceeds its previous high of 67p makes sense, but visually this is already giving hope. 

Should 80p be bettered we can calculate future movement to 110p, potentially breaking above the downtrend since 2019.

Closure above 110p will be regarded as a big deal, calculating with the potential of blockbuster growth to 182p, virtually equalling the price before Covid-19 started to do its worst in February this year. 

Beyond such a level, we shall need to take a further look at the tea leaves.

Source: Trends and Targets      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.