Until widespread legalisation comes to pass in the USA and indeed the world those losses look set to continue into the future. Due the boom in the industry, competition is fierce in the production, extraction, distribution and retail side of the industry, which has led to price contraction and in turn profit margin declines.
Canopy has plenty of company in this recent demise, Tilray ( TLRY ) has suffered an even greater decline and also has had its fair share of controversy, namely the offloading of shares by its board. The charismatic founder of CGC recently found himself on the scrapheap after STZ made the decision to end his role as CEO within the company, due to concerns of reckless spending and questionable management decisions.
Canopy stock is currently trading at a 50% discount from its peak in late 2018, but this may present an opportunity to catch a nice reversal trade, so let’s take a look at the charts for some clues to where the stock price is heading in the near term, while also remembering that a 50% discount still leaves the stock at quite a high valuation.
So as to surmise, for a reversal trade there is considerable confluence between indicators and price action, despite this it is advisable to wait for more confirmation from a break above the 24MA and break above the momentum downtrend. For extra caution await a spike in a new higher high on the .
Firstly, what is obvious from the chart is that symmetry exists between the 2018 and 2019 declines, with 57 % as the mean decline. Such symmetry should be considered as a good are to consider a reversal, but in tandem with further confirmation. The indicator has also made a strong reversal of the bottom while has also become predominantly .
What helps a bias on the side is that the reversal level of $24 has been confirmed as strong support in the past, having flipped from resistance.
Canopy Growth Corp. engages in the production and sale of medical cannabis. The company offers products including oils and concentrates, soft gel capsules and hemp. It focuses on the treatment of chronic pain, seizures, muscle spasms, nausea, and loss of appetite. The company was founded by Bruce Linton on August 5, 2009 and is headquartered in Smith Falls, Canada.
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