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Fan Yang

Canopy Growth Corporation (CGC) Extending Bearish Breakout

In late March, we saw shares of Canopy Growth #CGC break below a triangle consolidation pattern, signaling a bearish swing ahead. 

Canopy Growth Corporation (CGC) in Bearish Breakout

After the breakout, price stuck around, above $40 a share. However, after a week of consolidation, we saw that price was unable to climb back above the $43.80 area, which was a previous support. The fact that this support pivot turned into resistance suggests that bears are in control of the market.

CGC Daily Chart

(click to enlarge)

Short-term Downside; Support:
- while the short-term price action appears to be bearish, we should note that the overall picture is slightly bullish, but choppy.
- With this in mind, we can anticipate support when price drops below $40, around the $36 area, which was a previous resistance pivot. 
- If price then holds under $40 on a pullback, I would be more convinced of a downside towards the $30 mark. 
- I would not anticipate any bullish outlook until the RSI has dipped below 30 and preferably has formed a bullish divergence against price.
- Also note that if price dips to $30, there will be a rising trendline that might act as another support factor. 
- I don't think we are at a point where CGC is bearish outside of the short-term correction against the hype in 2018. 
- But, we should expect a period of choppiness with upside from $36, and even more so from $30. 

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