Hello Traders, Canopy Growth, the world's largest Weed company, is correcting within a wave „C“ of „(2)“, alternate in a wave „W-X-Y“ of (2). The possible wave „B“ high @ $52.74 is important to overcome, cause it would imply that the correction is done. Observing the development in the past days, you will notice, that the negative news flow topped on August 15, the day CGC announced earnings, with a massive gap to the downside. Also important to watch is the high volume of traded shares, which was well above the 21-day avg. But more important from a candle-stick perspective is the formation that developed in the past two days. I think that a „bullish-harami“ formation (watch ellipse) formed at the bottom, which indicates a possible change of trend. A bullish-harami is formed when after a long downtrend a red candle took place and the very next day a gap to the upside at the open occurs. The latter candle is fully surrounded by the red candle. This is exactly what happens here. If this formation works out, the stock has made an important low @26.92 and will advance strongly in the coming days and week ahead. Short term traders can catch this chance for a trade with an interesting stop loss level at the low @26.92! The technical instruments are not as clear as the candlesticks are. MACD and Stoch not showing „oversold“ conditions, but Stoch has made a „double“ bottom, while MACD is still declining. The Donchian channel announces, that CGC is in a downtrend, pricing below is middle (avg) line and stretching the lower line to the downside. So a mixed setup for these stocks. So it could become an interesting time for CGC the weeks ahead and I will watch this stock closely.
Have a great Sunday... ruebennase
Feel free to ask or comment. Trading this analyze is at your own risk!
Very interesting and I share this notion. I’m just waiting to see what SPY will be doing this coming week, as another significant pullback there, would definitely drag CGC and others, down with it. The stop loss does take that into account, but a proper and anticipated market crash would see all stocks down significantly, pre market. SPY is currently trading below its 50MA, bounced on its 200MA, then got rejected by its 50MA at a retest. Investors are ready to dump at the first sign of another pull back.
AAAAAVVVVV
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I think we will be retesting 24-25$ USD level based on today's opening. Doesn't look good, eyes on legalization 2.0
ruebennase
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@AAAAAVVVVV,
Hi, good eye for the development. your area got reached. Switched the count to an impulsive wave 3 (in progress) of 5 down; target @ or around 18.75 (A=C)
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@ruebennase, not sure about a further drop. Might be selling my October 25$ puts. But will certainly appreciate further bleeding
MJC77
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Have a look at CannTrust Holdings (TRST)...it's even better but I'm with Barkworth - wait for an SPX pullback before buying in.