Finance

Will the market be more positive for Canopy Growth in 2020?

The entire cannabis sector has not had an easy year. The gloomy mood that the cannabis industry was in caused cannabis stocks to change the year with bitter losses. Canopy Growth was also in the aforementioned downtrend. The Canopy Growth stock has had a turbulent year on the stock market. The share price rose steadily at the beginning of 2018, before falling at the end of the year.

In 2019 the situation on the stock market looked similar to the year prior. Initially, the papers of Canopy Growth gained substantial value before they finally fell in a long-lasting downward spiral. Will things look up for Canopy Growth in 2020?

The stock dropped to its lowest level since the end of 2017 in November 2019 and was only quoted at $13.95 on the NYSE. By this time, the stock had moved 73.54% away from their 52-week high of $52.72, which was reached on May 1, 2019.

By the end of the year, Canopy’s shares had recovered somewhat but still closed in 2019 with a total loss of 21.51% at $21.09. This was about 60% below the year’s high in the turbulent cannabis industry. As such, the company and its investors are looking for a brighter future for Canopy Growth in 2020.

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A look at Canopy Growth in 2020

Like its industry peers, the shaken Canopy Growth stock lost significant ground last year.

The question now is whether the downward trend will pick up speed again or whether there is a chance of recovery for Canopy Growth in 2020.

Since the start of 2020, Canopy Growth shares have been comparatively stable at around $20. In order to make a guess about how the cannabis situation on the stock could go on, TheStreet took a look at the stock chart of Canopy Growth right at the beginning of the year and examined the downward pull of the past months.

As TheStreet wrote, it seems that the paper has broken through the resistance of the downward trend.

“In a small rally around the turn of the year, the stock increased above the 20 and 50-day moving averages,” stated TheStreet.

Thereby, the stock is holding above the critical resistance of $17.50. There is the possibility that it could rise to $22.50, which could trigger a 10% to 20% recovery to around $25.

Is a rebound expected for Canopy Growth in 2020?

Canopy Growth has seen a wave of negative news in recent months, but recent developments in the industry may keep the stock afloat. (Source)

The decisive factor for Canopy Growth in 2020, however, is that its shares hold above $17.50. If the price falls below that level, it could become critical and the 2019 lows could appear on the chart again.

But at the moment it looks more like the stock of the Canadian cannabis company is on the verge of a rebound.

What will actually happen next remains to be seen, as a glance at the stock chart always represents a glimpse into the past and allows only vague assumptions about future developments.

Investors hope for the best in 2020

Shareholders may also be waiting for some positive signals for Canopy Growth in 2020, as well as for some ease in the situation around the cannabis sector.

This could also bring new impulses for cannabis stocks. In the past weeks, it has been comparatively quiet since David Klein was appointed as the new CEO of Canopy Growth in 2020.

Analysts agree at least for the most part. In the long term, five analysts rate the shares as “buy” and three “hold.” In general, it should remain interesting to see how the sector will develop in 2020.

(Featured image by Austin Distel via Unsplash)

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Andrew Ross

Andrew Ross is a features writer whose stories are centered on emerging economies and fast-growing companies. His articles often look at trade policies and practices, geopolitics, mining and commodities, as well as the exciting world of technology. He also covers industries that have piqued the interest of the stock market, such as cryptocurrency and cannabis. He is a certified gadget enthusiast.