CW_Trades
Short

CGC Support Test

NYSE:CGC   CANOPY GROWTH CORPORATION
Canopy Growth Corp is down roughly -15% on the trading week as global fears over Covid19 have finally gripped markets after a month of essentially dismissing the potential negative economic impacts.

CGC is currently trading within a parallel channel which began forming in late 2019, with an upper resistance level of $22.50 and a lower support level of $17.80. Yesterday saw traders close price just above the lower support level , or the bottom of the parallel range, which is an important level to watch in Fridays trading. A hold above the lower support line would indicate that bulls are still attempting to keep price in a consolidation range, while a close below the lower support level would indicate that bulls are losing the upper hand and becoming more fearful of Covid19's potential impact on economic activity across all sectors.

Given the severity of the market decline this week with indices such as the DOW Jones having its worst 1-day decline in history yesterday, its fastest 10% decline ever, as well as its worst 6-day performance since 1928(just before the Great Depression), its likely that traders will be unwilling to buy the dip in equities and hold stocks over the weekend.

Should traders fail to hold CGC above the lower range of the orange channel today, the next likely target is a retest of November 2019's low of $13.81 shown in blue.

Both indicators below the chart are showing negative momentum and trend behind price with the PPO in a bearish crossover and now moving below the centerline, as well as the RSI in a decline and also below its centerline as well.

Current view is bearish due to the overall fear gripping markets right now and CGC's position within the channel after yesterdays close.

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