The Cannabis industry has been in a bear market long before the general markets crashed.
When we talk about production capacity, Aurora Cannabis is one of the leaders in the industry. The company is expanding internationally, and it has reached markets in Latin America and Europe. Because of these factors, I would like to analyze its technical part.
I have a cluster of information to say that prices may start going up from here on.
First, price is currently in a weekly demand zone. This demand zone is what we called an imbalance zone. The imbalanace zone took place between August and October of 16'. Buyers were more aggresive than sellers at that moment. Price is testing this zone, so it is very important physicological zone for bulls. Second, there is a positive divergence between price and its RSI. While price made a new low in March 20', the RSI kept flat. Also, price is currently oversold. Finally, the MACD indicator is showing that the MACD line crossed over the signal line. If it keeps above, its a great sign to keep bullish.
I disagree with the interpretation of underlying weakness as "oversold". It is currently trading at fair value. It has fully retraced an irrational move up to $12.50. Fundamentally, ACB is not worth more than $1. It has recently bounced. It is now ready to settle in the lows for a time.
Given its low valuation now, volatility is likely to increase. After all, each 1% is currently just $0.008 (0.8 Dollar cents). So we'll see moves of 10% to 20% in either direction, with ease, and in reality this will be just $0.8 to $0.15.
In my opinion, reading the charts, For at least the next 6 months, we'll see ACB trade around the current levels, and it should allow for very nice swing trades.
Going long right now would be a pure gamble, not an actual investment.
My 2 cents, of course, with respect. Offered here for a healthy debate.
Andresa30
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@Barkworth, Thank you for your feedback. I respect your opinion, and I agree when you say that the company, fundamentally speaking,is not well positioned. However, what I see here in the charts are indicators, and the divergence between a momentum indicator such as RSI and its price is telling us that price may not go any lower in the near term. In fact, as i said the price is currently in a weekly demand zone. This could make prices go higher. I can't tell how high the price may go. Do you see the lower blue line. I think it could reach that zone and find resistance there. You may say an increase of almost 90% (from $0.81 to $1.55) is impossible, but I think it is probable. I like debates man. Greetings!!!
Barkworth
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@Andresa30, You can't argue with the charts. I see what you see. I think $1.55 is a very reasonable target. On the way down, $1.47 was an important level.
I have been studying indicators for some time, and I feel that they become less accurate after steep drops. Weekly MACD is green though, and that is a usually a big deal.
Trade safe, and stay safe.
Andresa30
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@Barkworth, thank you for your insights. I will take them into considaration.
adamans
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@Andresa30, This guy has 0 clue what he says. In 1 case he wants it 0.15, in one case he wants it 1.55