CGC breaks back above 20-day moving average
Canopy Growth Corporation (CGC) Technical Analysis Report for Nov 08, 2019 | by Techniquant Editorial Team
CGC ended the week 8.93% higher at 21.47 after surging $2.39 (12.53%) today on high volume, significantly outperforming the S&P 500 (0.26%). This is the biggest single-day gain in over six months. The last time we've seen such an unusually strong single-day gain on April 22nd, CGC actually lost -1.74% on the following trading day. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 19.93, the share confirmed its breakout through the prior session high after trading up to $1.75 above it intraday.
Daily Candlestick Chart (CGC as at Nov 08, 2019):
Friday's trading range has been $2.78 (14.62%), that's far above the last trading month's daily average range of $1.05. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CGC.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Regardless of a weak opening Canopy Growth managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
The market managed to close back above the 20-day moving average at 20.43 for the first time since October 28th. After having been unable to move lower than 19.02 in the prior session, the stock found buyers again around the same price level today at 18.90.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Up Move" stand out. Its common bullish interpretation has been confirmed for Canopy Growth. Out of 84 times, CGC closed higher 55.95% 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 64.29% with an average market move of 9.95%.