Canopy Growth Corp. (CGC) gapped to the upside today making a new high for the move up and breaking out on our Point and Figure charts. Let's check the charts again.
On November 30 we wrote that, "I may be late to the game but traders could approach CGC from the long side risking a close below $24." And we gave a $32 price target which CGC almost touched today.
In this updated daily bar chart of CGC, below, we can see that prices corrected lower in December to retest the rising 50-day moving average line. Prices touched $24 but did not close below $24 our stop loss suggestion. CGC is now above both a rising 50-day moving average and above a rising 200-day moving average line.
The On-Balance-Volume (OBV) line did not decline much when prices pulled back last month telling us that longs did not turn into aggressive sellers.
The Moving Average Convergence Divergence (MACD) oscillator is now crossing to the upside above the zero line for an outright buy signal.
In this weekly bar chart of CGC, below, we can see that prices are emerging from an 18-month base pattern. The 40-week moving average line is bullish.
The weekly OBV line has been trending higher since November 2019. The MACD oscillator has narrowed in recent weeks but it is still pointed up and bullish.
In this daily Point and Figure chart of CGC, below, we can see a potential upside price target in the $46 area.
In this second Point and Figure chart of CGC, below, we used weekly close only price data. Here a potential target of $58 is shown.
Bottom line strategy: I have no idea if a Democratic controlled Congress is more in favor of legalization of cannabis but the chart of CGC is bullish. Continue to hold longs in previous recommendations.
