Marijuana Stocks: Trend Toward Higher Canopy Growth Stock Prices Continues
TWMJF Stock: The Path of Least Resistance Is Toward Higher Prices
I am focusing on Canopy Growth Corp (OTCMKTS: TWMJF, TSE: WEED) stock because certain developments I have been following on the TWMJF stock chart have been resolved. I am going to outline these developments and what they mean for Canopy Growth stock going forward.
If you follow my work, then these developments I have been following should come as no surprise because I have outlined them in two reports. The first report was published on December 5 and was titled “Marijuana Stock: Anticipating the Next move in Canopy Growth Stock.” The second report was published on December 13 and was titled “Marijuana Stock: Canopy Growth Stock is on the Verge of its Next Advance.”
These developments are all technical in nature and, therefore, they are based on a method of investment analysis called technical analysis. This method is based on using historical price and volume data as a means of projecting what the future may bring. This historical data is found on the company’s stock chart. As a result, my views on Canopy Growth stock have been generated using the TWMJF stock chart.
I have been watching a particular price pattern on the Canopy Growth stock chart and that pattern is highlighted on the following TWMJF stock chart.
Chart courtesy of StockCharts.com
The technical price pattern highlighted on the Canopy Growth stock chart is a symmetrical triangle. This pattern develops because the price action is characterized by a series of lower highs and higher lows. Connecting these highs and lows using a trend line will define the triangle, as well as determine where price support and price resistance can be found.
Triangle patterns are very special patterns and, I must admit, they are among my favorites. The reason why I like this pattern so much is that the resolution of this pattern determines which direction the stock price is heading in next. Breaking above resistance suggests that higher prices are likely to follow while breaking below support suggests that lower prices are likely to follow.
The good news I have to share is that on December 18, TWMJF stock broke out above resistance, which completed the symmetrical triangle. The completed triangle is implying that higher prices are on the horizon.
This bullish implication is being supported by the moving average convergence/divergence (MACD) indicator highlighted in the lower panel of the stock chart.
MACD is momentum indicator used to distinguish between bullish and bearish momentum. This is very influential information because a stock cannot sustain a move toward higher prices without bullish momentum.
A bullish cross was just generated, reinforcing the implications suggested by the completed triangle and, therefore, I have to believe that higher prices are likely to follow. The last time a bullish MACD cross was generated, the stock price proceeded to move from a low of $10.98 to a high of $16.98, illustrating that this indication has merit.
Now that I have established why I believe that higher stock prices are on the horizon, let’s take a look at the grand scheme of things by analyzing the predominant trend.
The predominant trend has been constructive in nature and is highlighted on the following Canopy Growth stock chart.
Chart courtesy of StockCharts.com
This TWMJF stock chart illustrates that the predominant trend has been constructive in nature.
Constructive price action is made of two distinct waves: a consolidation wave and an impulse wave.
The impulse waves are highlighted in green and outline the stage in a bullish trend where the stock price sustains a move toward higher prices.
The consolidation waves are highlighted in purple and outline the stage in a bullish trend where the stock price corrects and refrains from advancing. The corrective price action is necessary to unwind any overbought conditions that were created, in order to sustain the health of the trend.
These waves work together in an alternating fashion to create and sustain a bullish trend.
The completed symmetrical triangle doubles as a consolidation wave and it suggests that a new impulse wave is now in development. Therefore, I expect that it shouldn’t be too long before TWMJF stock is forging new all-time highs.
Analyst Take:
The developments on the TWMJF stock chart are suggesting that the trend toward higher Canopy Growth stock prices is set to continue. This view was generated using technical analysis and until there are indications suggesting otherwise, I will maintain my bullish view on Canopy Growth Corp.
