Technical Analysis of Canopy Growth Corporation
(By Glenford S. Robinson)
Canopy Growth Corporation (NYSE: CGC) is currently trading at 38.35 as of 9 am Eastern Standard Time, 10/26/2018. The stock is therefore operating in what we (Mstardom Finance Traders) call the red zone (36.71-44.88) or danger zone where it can either go up or down. This is very important for short-term or long-term traders to know. If the trader is in a long-term position, I would think that he or she would be occupying a bullish or long position. However, on the short-term side, I would expect any short positions to be short-term. This thinking was conceived as a result of the overall fundamentals of the company and its stock price including the sector and industry in which it is operating in.
Our proprietary trading strategy or the Mstardom Finance proprietary trading strategy tells us that any price range between 36.71 and 44.88 is a sell signal. However, traders should keep in mind that the closer the price gets to 36.71 is the more likely a reversal could occur. This is why we call this range the danger zone because anything can happen between these price points. This is where candlestick monitoring and stochastic monitoring coupled with a short timeframe is paramount.
Any trader deciding to trade the red zone should stay glued to his or her trading station monitors because any trade executed in this red zone range has a low probability of success from a short-term shorting perspective. Any long-term bullish trade in the red zone is fine, based on the fundamentals of the company. A short-term short position or a short-term long position could be a problem for the less experienced trader.
To be on the safe side of things, we are buyers at the 36.71 and below price point and anything close. For example, at the price point of 38.61, we will become long-term buyers or bulls because we anticipate this trade to be a high probability trade on a long-term basis. We understand that the price could easily go down lower than 38.61, but we are fine with that once we are not using leverage. Leverage is for the professionals. Leverage is when a broker lends money to the trader for him or her to make more trades than the trader’s original money can make. Brokers will liquidate or sell your stock at a loss for you if they think that the stock is losing value. Many accredited investors do not use leverage, and if they do, they use it very sparingly, such as exposing a very small percentage of their portfolio to leveraged or borrowed money.
So, what about the higher ranges or support levels price points? The next price point or hypothetical resistance area is 58.59. Our proprietary trading strategy tells us to become bears at the 58.59 price levels. Therefore, any price anywhere close to 58.59 or higher will turn us into sellers or bears. We must follow our trading strategy because not doing so is a sure way to fail in trading. A trader without a plan has planned to fail in trading the financial markets, and we do not wish to become victims of the financial markets.
Another projected selling price point for CGC is at the 72.23 price level. We will become bears again at the 72.23 level because investors are going to want to take profits a week or days after they have poured in their millions of dollars following a positive news article catalyst.
We will continue with more Technical Analysis for CGC in future Technical Analysis articles.
Disclosure: I/we/us/Mstardom Finance periodically trade CGC stock, but don’t have a position in the stock at this time.
Disclaimer: (c)Mstardom.com; Mstardom, Inc., Mstardom Finance are not financial or investment advisors.
Mr. Glenford S. Robinson is the Chief Executive Officer and Founder of Mstardom Finance. He is the editor-in-chief of News and Magazine article publishing. Mr. Robinson is also the lead developer of the Mstardom Finance Platform at Mstardom.com. He is passionate about quantitative finance and technologies associated with that discipline, such as python-based algorithmic programing. Mr. Robinson is also a Clinical Laboratory Scientist currently practicing laboratory medicine. When Mr. Robinson is not practicing laboratory medicine, writing articles, or studying finance, he is creating mathematical and statistical modules, using quantitative approaches to identify trading opportunities in the Forex and Stock Market.