Earnings Play: Canopy Growth Corporation

Cannabis stocks got a boost after 5 states legalized marijuana.

Charts (1)

On Monday, before market, Canopy Growth Corporation (CGC) is anticipated to release third quarter revenue of approximately $119.1 million vs. $76.6 million last year. The company cultivates and sells medicinal and recreational cannabis, and on November 4th, ABC News reported that 5 states passed marijuana legalization measures.   

Looking at a daily chart, in logarithmic scale, Canopy's stock price has been in a short-term uptrend since the beginning of October. The RSI is bullish and currently just below overbought territory. The simple moving averages (SMA) have just turned bullish, as the 20-day SMA is above the 50-day SMA, and the 50-day SMA is above the 200-day SMA. On the chart traders can see that after the election on November 3rd Canopy's stock price became very volatile and has gapped at each market open since. Price will likely continue to rise towards the 2020 high of $26.00. At around $26.00 the stock will probably sell off a bit as speculators take some profits, and price will likely pull back to the 20-day SMA around the bullish trendline. If price can manage to hold above the bullish trendline then it could be a chance for late comers to jump on for a retest of $26.00. If price breaks out to the upside of 26.00, then its next targets would be $29.60 and 34.30, levels last reached in 2019. On the flip side, if Canopy pulls back to the bullish trendline and breaks below it, then a rebound could occur at around 17.40. If price cant hold at 17.40 then it could dip to 15.50, which would be a bearish signal as price be below the 200-day SMA. If price cant find footing on 15.50, then it will likely decline further to 13.80.             

Source: GAIN Capital, TradingView

More from Earnings


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.