ACBFF Stock: A Sustained Move Toward Higher Stock Prices Is Currently in Development
I am following up on a report on Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) titled “Aurora Cannabis Stock Is on the Verge of Breaking Out” that was published on September 6, 2018.
In that report, I outlined that ACBFF stock was on the verge of breaking out and needed to break above a level of price resistance at $7.00. Doing so would set the wheels in motion where higher ACBFF share prices were likely to prevail.
That event has come and gone, and higher Aurora Cannabis stock prices have prevailed as a result. ACBFF shares are currently trading at $9.73, which is 46.1% higher since my last report was published.
ACBFF stock is currently in the midst of a sustained move toward higher stock prices. This move was originally suggested—and is currently being reinforced—by the technical indications highlighted on the following Aurora Cannabis price chart.
Chart courtesy of StockCharts.com
The wave structure and the moving average convergence/divergence (MACD) indicator highlighted on the chart above are suggesting that a sustained move toward higher prices is currently in development.
This wave structure consisting of impulse waves and consolidation waves is responsible for creating and sustaining trends.
The waves highlighted in green are impulse waves. In a bull market, impulse waves capture the period in time where a stock sustains a progressive move toward higher prices.
The wave highlighted in purple is a consolidation wave. In a bull market, consolidation waves capture the period in time where a stock stages a correction, creating the necessary conditions so an advancing impulse wave can follow.
When Aurora Cannabis stock closed above resistance at $7.00, it completed the consolidation wave, suggesting that an advancing impulse wave is likely to follow.
This notion that higher prices are in development continues to be reinforced by the MACD indicator.
MACD is a simple yet effective trend-following momentum indicator. This indicator uses the crossing of a signal line to differentiate whether bullish or bearish momentum is influencing the trading action in a stock.
A stock experiencing bullish momentum has a tendency to appreciate, while a stock experiencing bearish momentum has a tendency to depreciate. This tendency for a stock to move alongside momentum is why the wave structure has coincided with the signals generated by the MACD indicator.
The combination of the completed consolidation wave and the bullish MACD signal continue to suggest that a sustained move toward higher prices is currently in development.
The great thing about this wave structure, aside from suggesting the direction a stock is heading in, is that it can also be used to generate a price objective for the move that is currently in development.
This objective is created based on the theory that impulse waves separated by a consolidation wave have a tendency to mirror each other in terms of length. Putting this theory to work suggests that $14.95 is currently a viable price objective.
From current prices, it suggests that ACBFF stock has 53.65% of further upside.
If you’re wondering when this objective may be met, I can’t say for sure. But there is a technical price pattern currently in development that will determine when Aurora Cannabis stock is ready to make another break toward higher prices.
This pattern is captured on the following Aurora Cannabis price chart.
Chart courtesy of StockCharts.com
The technical price pattern captured on the ACBFF stock chart is a symmetrical triangle.
A symmetrical triangle is a technical price pattern that is created when the price action is characterized by a series of higher lows and lower highs. Connecting the peaks and troughs created by this price action produces two converging trend lines that capture this pattern.
In a bullish trend, triangle price patterns act as continuation patterns. If ACBFF stock is set to continue its sustained move toward higher prices, Aurora Cannabis stock will break out of this pattern in an upward direction, putting it one step closer to the $14.95 price objective.
The recent technical indications that have been generated on the ACBFF stock chart continue to suggest that Aurora Cannabis stock is destined for higher prices.