Cannabis Weakness Continues As Canopy Growth Corp Drops 50-MA Support On-Open

The cannabis sector started the week with a thud today, as bellweather stalwart Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) slipped below its 50-day moving average on-open. The rather hawkish tone spilled into most components of the market, exacerbating losses for many junior cannabis issues which have been pummeled over the past month.

After testing the simple 50-day MA on Wednesday, support convincingly gave way this morning. Prices sank below the 50-day MA right from the get-go ($37.52) and never looked back. The first initial bounce in Canopy Growth only took prices from mid-$36 terrain to $37.00/share even—thus confirming the break was indeed real.

Currently, Canopy Growth is currently lower by $1.87 to $35.90/share (↓4.95%)

As virtually is always the case, the cannabis sector joined in unison. Present weakness appears to be more concentrated in the mid and high-end of the markets, which select juniors outperforming on a relative basis. Aurora Cannabis Inc. is lower by $0.53 to $8.09/share (↓6.15%), Aphria Inc. declined $0.62 to $11.13/share (↓5.28%), CannTrust Holdings Inc. dropped $0.40 to $7.04/share (↓5.38%), and The Green Organic Dutchman Holdings shed $0.28 to $5.76/share (↓4.64%).

On a brighter note, there are some pockets of relative strength in the market. Recently battered Emerald Health Therapeutics Inc. bucked the early sector downtrend, printing as high as $2.85/share below paring gains. The stock is presently clinging to minor gains. Sproutly Canada Inc., which was previously profiled on Midas Letter, has hung in tough for a fourth consecutive session (↑2.67%).

But for the vast majority of issues, continued price degradation rules the day. With Canopy Growth jumping shark on its key 50-Day MA near-term sentiment/trend gauge, the prospects for a sizable reversal of fortune remain dim.

The next area of support for Canopy Growth is the $34.50-34.75 area, followed by the more technically-significant $33.30-33.76/share area. The latter range is the inflection area which presages Canopy Growth’s May breakout level and subsequent re-test on May 28th.

Original article: Cannabis Weakness Continues As Canopy Growth Corp Drops 50-MA Support On-Open

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