This current week is the period in which Canada is expected to pass sweeping legislation to legalize recreational cannabis use. Investors are currently positioning themselves for the outcome.
On May 3, we covered Cronos Group, a Canadian cannabis produced that posted strong fundamentals yet declined by 15% (1) on fears that its aggressive expansion and investments may not produce an immediately favorable return.
On a technical level, we wrote that from a “technical” standpoint, the current bearish sentiment can’t be confirmed unless the move follows through; that is price breaks below the support/swing-low point at (2).
As you can see on the chart, that breakdown follow-through never occurred, and is now rising on relatively high volume to meet its April 17 highs at (3) of $7.90.
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