First of all, let me ask this: Why do so many people hate the movie Watchmen? Watchmen is one of my favorite movies (My favorite movie of all time is a tie between Clerks (1994) and (The Good, The Bad, And The Ugly (1966)) So and this movie is visually stunning, the story is great and it's just awesome. I think that the reason a lot of people dislike this film is because they went into it expecting an action movie and it was really something more. I loved this movie so much that instead of buying the normal movie for $4 at a store (it was brand new) I bought the Ultimate Cut of the movie for $42 on Amazon and I just got it yesterday from Amazon and I have heard the Director's Cut is the best version and that the Ultimate Cut is the Director's Cut with scenes from the animated movie "The Black Freighter" mixed in with it.
Back to the topic, I have been hearing rumors about a Watchmen sequel and even though I would watch it and im sure it would be great, I wouldn't appreciate and respect it like I did the first movie. Watchmen was extremely faithful to the graphic novel and the graphic novel is possibly my favorite book. A Watchmen sequel would just be unfaithful to the graphic novel unless its a prequel with the recent " Before Watchmen" books like "Before Watchmen: Rorschach/Comedian" but I don't think they would do that, and if they did, it would probably be direct-to-DVD animated films.
If they do a Watchmen Sequel how would they continue the story, and the ending to the first one was perfect and plus *SPOILER ALERT* Rorschach died in the first movie and part of the reason I loved Watchmen so much was Rorschach's quotes and Jackie Earle Haley's portrayal as Rorschach. If they want to continue the story make a graphic novel in the form of a sequel to the movie, or just make an animated movie.