Cannabis Stocks Technical Analysis – January 20, 2019

Cannabis Stocks Technical Analysis provided on Strain Insider is for information purposes only. Signals that are given in this article are solely based on probabilities. Every trading and investment move involves risk, you should conduct your own research when making a decision. Strain Insider and its authors are not accountable for any trading decisions you make.

Cannabis stocks have proven to be a highly promising investment and trading vehicle during 2018. With stock prices that increased by up to four-digit percentages and the improvements of medical and recreational cannabis legislation around the globe, the legal marijuana industry can be considered as one of the most promising in the world. In this weekly technical analysis series, Strain Insider aims to provide an outlook on five of the most relevant cannabis stocks.

Related: Cannabis Stocks Technical Analysis – November 2018

This week’s piece features Aurora Cannabis Inc., GW Pharmaceuticals Plc., Tilray Inc., Cronos Group Inc. and Canopy Growth Corporation.

Related: Cannabis Industry Weekly Roundup – December 8

Tilray (NASDAQ: TLRY)

Daily Chart – Chart created with Tradingview

Short-term

Neutral

Mid-term

Neutral

Long-term

Buy

Since my last analysis, Canadian cannabis producer Tilray rose by 67 percent as it bounced off the trendline support and reached as high as $106, where it then faced rejection by the resistance. With it currently sitting at the trendline support, Tilray could bounce again or break through the support. The RSI gives no clear signal so it is advised to wait for confirmation. The strong rejection by the resistance implies further downward movement, as we can observe a series of lower highs since its peak in September.

Aurora Cannabis (NYSE: ACB)

Daily Chart – Chart created with Tradingview

Short-term

Sell

Mid-term

Buy

Long-term

Buy

Aurora Cannabis Inc. reached exactly the marked territories. While it went slightly below the support levels, it quickly bounced off that region as rose also 67 percent up to the resistance between $7.3 and $8.20 where it faced rejection. The 50-day-EMA acted as a support so far but we must assume a continuation of the decline until Aurora reaches its support levels again. Interestingly enough, the golden pocket zone lies at the top of the support zone, which makes a bounce off that zone very likely. This implies another twelve percent decline in price.

Canopy Growth Corporation (NASDAQ: CGC)

Daily Chart – Chart created with Tradingview

Short-term

Sell

Mid-term

Buy

Long-term

Buy

In my prior analysis I highlighted the bullish divergence found in the Canopy chart. As a matter of fact, it broke the trendline support all the way down to the marked support at around $25, where it bounced heavily resulting in a nearly 81 percent rise. Canopy even broke the resistance between $35 and $36, which now acts as support. With the RSI being located in overbought regions, we can assume a decline of 16 percent down to the prior resistance.

Cronos Group (NASDAQ: CRON)

Daily Chart – Chart created with Tradingview

Short-term

Sell

Mid-term

Buy

Long-term

Buy

Cronos fell down to the support range between $8.8 and $9.9 where it bounced off the golden pocket zone. As a consequence, Cronos rose by nearly 62 percent, all the way up to the resistance between $12.80 and $15.50. With it currently being in a resistance area and the RSI indicating overbought regions, we can assume a short-term price correction. The next major support is found at the trendline.

GW Pharmaceuticals (NASDAQ: GWPH)

Weekly Chart – Chart created with Tradingview

Short-term

Sell

Mid-term

Buy

Long-term

Neutral

In contrary to my assumption, GW Pharmaceuticals didn’t bounce off of the trendline support but instead broke the trendline heavily with a 23 percent decline in price. However, this unusual attempt was a false breakout and it resulted in a quick recovery of 53 percent to reach the resistance as initially suspected. With it currently sitting at the resistance at around $135, GW Pharmaceuticals needs to break it in order to maintain bullish momentum in the short-term. If it fails to break the resistance, the next support lies at the trendline support, which is still valid due to the false breakout.

The S&P 500 declined by 10.6 percent since my last analysis but it also quickly recovered by 14.4 percent. That being said, the S&P 500 stands higher than in my last analysis.

In addition to that, the enormous and quick recovery paired with the heavy increase in volume indicates further bullish momentum for the short- to medium-term.

Moreover, at the time of writing, and according to the global market capitalization on Coinmarketcap, Bitcoin didn’t show much volatility and is still located at around $3600.

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