Canopy Growth Corp. (CGC) is set to report its quarterly earnings numbers on Friday. Cannabis investors have been sorely disappointed in the stock's performance with all the hype around this new industry.
Some forecasters who believe this is a long-term growth industry say that it is experiencing some short-term pain. They expect that further legalization will produce outsized stock gains in the future. Detractors say that the run up in 2017 and 2018 was just another bubble that will go down in the history books.
Regardless of where you stand in the discussion we can look closer at the latest charts of CGC.
In the daily bar chart of CGC, below, we can see that prices declined significantly from May to November. Trading volume was very heavy at the November low, suggesting to us that weak longs dumped positions and stronger hands stepped in to buy.
Prices have since recovered a bit and turned the slope of the 50-day moving average line positive. The 200-day moving average line is still showing a negative slope, however. Prices had firmed into the middle of January but have slide back down to break the 50-day moving average.
The On-Balance-Volume (OBV) line has weakened since the January high and tells us that sellers of CGC have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has also weakened and is close to moving below the zero line for an outright sell signal.