There’s been a lot happening in the Cannabis stock space. Aurora Cannabis (ACBFF) announced its plans to acquire MedReleaf (MEDFF), Canopy Growth Corp (TWMJF) is scheduled to be listed on the NYSE at the end of this month, and Maricann completes its European acquisition of Haxxon AG.
Amid all of this activity, Aphria (APHQF) is currently basing, reaching a potential breakout point at relatively high volume. Take a look at the chart below:
Aphria was in a short-term downtrend, hitting a relative bottom in April. It made a correction to the upside (1) with relatively high volume (2).
Following this potential upside “correction” we watched as it retested its April swing-low. However, price did not violate that range and instead formed a deep “cup” formation.
Currently, this “cup” is peaking (3), once again with higher volume (4). This indicates that buyers may be exerting more pressure than sellers. Looking at Aphria’s performance since it s peak in January of this year, this pattern may smack something of a double bottom.
The question now is whether it will break out. And if so, will it follow through. At the time of this writing, there is no direct fundamental info driving this stock, but given the company’s fundamentals, it may be rising in relation to the positive news driving the industry as a whole.
Our Swing Trade Ideas:
This may be an aggressive entry, but for those interested in swing trading this setup, we recommend the following:
- Buy Aphria if it breaks above $10.00 on high volume.
- Place a stop-loss at the bottom of the base, $6.90.
- Short-term profit target is at $13.50 which is the 50% Fib retracement from the January high.
- Longer-term profit target is at the January high of $19.90
These recommendations are a solicitation for entering into derivatives transactions. All known news and events have already been factored into the price of the underlying derivatives discussed. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. No representation is being made that any account has in the past, or will in the future, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.
Trading Futures, Options on Futures, and Forex involves substantial risk of loss and is not suitable for all investors. Carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment and only risk capital should be used. Opinions, market data, and recommendations are subject to change at any time. The lower the margin used the higher the leverage and therefore increases your risk. Past performance is not necessarily indicative of future results.