ACB closes lower for the 2nd day in a row
Aurora Cannabis Inc (ACB) Technical Analysis Report for Apr 06, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ACB finished Monday at 0.80 edging lower $0.01 (-1.23%), strongly underperforming the S&P 500 (7.03%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (ACB as at Apr 06, 2020):
Monday's trading range has been $0.08 (9.52%), that's below the last trading month's daily average range of $0.12. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ACB.
After trading down to 0.78 earlier during the day, the share bounced off the key technical support level at 0.78 (S1). The failure to close below the support could increase that levels significance as support going forward. The stock was bought again around 0.78 after having seen lows at 0.79, 0.80 and 0.78 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on March 5th, ACB actually lost -10.69% on the following trading day.
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 0.92 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 0.78 where further sell stops might get triggered. With prices trading close to this year's low at 0.60, downside momentum could accelerate should Aurora Cannabis break out to new lows for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Aurora Cannabis. Out of 138 times, ACB closed higher 56.52% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 57.25% with an average market move of 8.72%.