With a market cap of $12.10 billion, Aphria (APHQF) is the third largest stock in the Canadian cannabis industry. It’s current cannabis production is estimated to yield around 230,000 kilos annually.
At the time of writing, there is no major fundamental news we’re aware of that might affect this stock. So, the following analysis pertains strictly to the stock’s technical aspects.
From April 16 to May 16, Aphria began forming a steady decline (1) and recovery (2) that formed the basis for a “cup” formation. The following five trading days saw a moderate selloff that quickly recovered.
Note that this “cup and handle” formation coincides with another formation—a double bottom—which can be seen at (3) and (4). The buying pressure accompanying each “peak” appears to comprise higher volume levels than those of the declines.
What we’re looking at is the volume at (5) which may or may not accompany the potential breakout at (6).
Our trading idea is as follows should APHQF break above 10.40 with high volume:
- Buy at $10.40
- Place Stop loss at $7.40
- The first target is at $14.30, the Feb 2 high
- The second target is at $19.80, near its January all-time high.
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