Canopy Growth Breaks Past Resistance And Looks To Be Changing Trends

Canopy Growth Corp. (NASDAQ:CGC) shares are trading higher Friday, possibly after Ohio’s new Senate bill states that medical marijuana could be given to any patient who can be “reasonably expected to benefit” from it.

The stock looks to be breaking out of a technical pattern and pushing higher. Canopy Growth was up 6.6% at $14.42 at press time.

Canopy Growth Daily Chart Analysis

• The stock has broken out of what technical traders call a falling wedge pattern after finally being able to break above resistance.
• The stock has been in a steady downtrend since the new year, getting pinched between narrowing highs and lows before finally being able to break above the pattern resistance and possibly showing signs of a trend change.
• The stock crossed above the 50-day moving average (green) Friday, but trades below the 200-day moving average (blue), indicating the stock may now be in a period of consolidation.
• The 50-day moving average may now hold as an area of support, while resistance may be found near the 200-day moving average.
• The Relative Strength Index (RSI) has started to push higher the past few weeks and now sits at 55 on the indicator. This shows the stock is now seeing more buying pressure than selling pressure.

What’s Next For Canopy Growth?

Bullish traders are looking to see the stock begin to form higher lows and start forming an uptrend. Bulls are looking to see the stock be able to trade above both moving averages in time for the sentiment in the stock to turn more bullish.

Bears are looking to see the stock fall back into the pattern and break below the pattern support. This could cause the stock to see strong bearish moves in the future and for the downward trend to continue.