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Fan Yang

Aurora Cannabis (ACBFF) Fails at Key Support

Recently I suggested that Aurora Cannibis could be setting up for a bullish trend. However, after today's bearish price action (down more than 6%), I am convinced that there is going to be more bearish correction before this over-hyped stock gets back on the bullish mode. 

ACBFF Daily Chart

(click to enlarge)

False Breakout:
- The bullish outlook was based on the fact that price action started to percolate in June after being able to hold above the 200-day simple moving average (SMA).
- We also saw the RSI tag 70, which is a sign that the market is able to build bullish momentum.
- However, price was rejected at $8.00.
- If price held above $6.60, it would still be above the 200-day simple moving average and a common support/resistance pivot in the past few months.
- Meanwhile, the RSI would have held above 40. 
- Basically, price fell below and the RSI dipped below. These are all signs that the last line of defense for the bullish mode have been broken.
- We should anticipate at least a dip to the $5.40-$5.45 area, with a possible extension to the $5.00 level. 

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