Canopy Growth Corp. (CGC) has started to make its move to the upside. We reviewed the charts on June 17, and wrote that, "I suspect that many states will be strapped for money, because of the pandemic shutdown and they will consider legalization as a source of income, despite earlier reluctance.
With the bullish divergences on the charts above, I would trade CGC from the long side, risking a close below $12. Add on strength looking for gains to the $40 area. Prices are moving up and generating some buy signals.
Let's check the latest charts.
In this updated daily bar chart of CGC, below, we can see that prices are breaking out on the upside of a sideways trading range. Prices are now above the rising 50-day moving average line and above the still declining 200-day moving average line. The daily On-Balance-Volume (OBV) line looks like it is starting to turn up and so is the Moving Average Convergence Divergence (MACD) oscillator.
In this weekly bar chart of CGC, below, we can see the picture turning more positive. We could end the week above the 40-week moving average line. The OBV line could firm up and the MACD oscillator is approaching the underside of the zero-line.
In this daily Point and Figure chart of CGC, below, we can see the new high and the $23 price target. The upside price target is not a big deal but reaching $23 will open the way to further gains, in my opinion.
Bottom line strategy: Continue to hold longs recommended last month. Raise stop loss protection to a close below $16. Become more aggressive buyers above $23.
