Canopy Growth published its figures about their stocks before the market opened. There were expected losses of $0.31 (CA$0.41) per share. The company is putting its expansion plans on hold in the domestic market. The indicator situation also turned away from the bulls. This means that the lower prices should be assumed, however, the market is fortunately about to gain higher prices again.
Will Canopy Growth stocks make a comeback?
On Nov. 14 figures were published for the past quarter of Canopy Growth stocks before the Canadian stock market opened.
A loss of $0.31 (CA$0.41) per share was expected. However, what knocked the bottom out of the market was the unexpected $0.82 (CA$1.08) losses per share. In other words, this equals a 13% increase in losses to $283.4 million (CA$374.6 million).
In addition, the company is putting its expansion plans on hold in the domestic market, where fewer stores were ultimately opened after cannabis legalization than previously anticipated.
The cannabis industry has had many ups and downs already. A year has passed since the legalization of cannabis and the Canadian cannabis stock market still has a long way to go.
Investors could make it easier on themselves and simply invest in hemp stocks like Veritas Farms Inc (OTC: VFRM). The company has done an excellent job of developing and bringing in steady profits.
Veritas’ revenues may be lower than those of larger companies like Canopy Growth, but Veritas makes up for this by offering investors a much more stable stock to invest in.
Canopy Growth and the indicator situation
With the fall below $18.85 (CA$24.92), the path is now cleared in the direction of much lower ranges. In the next step, we have to assume prices in the range of $12.42 (CA$16.41) before the bulls will have another chance to win the market for themselves and build up a bottom.
This means that the bottom scenario is essential for now and we have to assume lower prices in the direct course. On a more general level, we continue to assume that the market will bottom out in the long term, followed by significantly higher prices again.
Canopy Growth could not hold above $18.85 (CA$24.92) and will continue to go further down. Even if the bottom is gone, we remain bullish for this stock in the long run.
The next target, however, is $12.42 (CA$16.41) before we can build a sustainable bottom. We have long since set a target range there that has now almost been reached. This means that when Canopy Growth reach the target range, we evaluate the situation and will deposit long positions in the market by displaying our indicators.
(Featured image by Austin Distel via Unsplash)
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