We covered Aurora Cannabis extensively in the last 12 months. From our ultra-bullish Aurora Cannabis stock forecast of 75 USD to Aurora Cannabis’ relative strength chart. Moreover, we concluded last week that the cannabis sector is moving to a hybrid space with the breakdown of sector leader Canopy Growth: Cannabis Market Breaks Down As High Beta Conditions Improve. Today we look (again) at Aurora Cannabis, but its price chart, as it is near a crucially important price level.
The cannabis space has enormous growth potential.
So Aurora Cannabis must be a good investment.
Yes, we believe so, but not only for the reason outlined above, but more importantly because the cannabis space may get a boost from a new ‘risk on’ cycle. Earlier today we published Stock Markets Testing Crucial Make-vs-Break Level in which we made the point that high beta stocks like cannabis might (finally) see the right environment to support them.
Only if the above is going to happen will we see fresh energy in the cannabis space, and in particular in Aurora Cannabis.
The weekly chart of Aurora Cannabis make the point.
We see 3 consecutive weeks of testing of 2-year rising support. So far support did hold strongly, but things look too ‘shaky’ to get too excited. We really want to see a strong move higher, soon, ideally to the 13 CAD area.
Cannabis stocks may publish great news but the fact of the matter is a hybrid cannabis stock market right now. So any cannabis stock breaking down will face a very hard time before getting bullish again. Avoiding the ugly breakdown is what matters to us.
That’s why July 2019 will be crucial for Aurora Cannabis.
If, and only IF, both conditions outlined above are met will we continue to be (super) bullish on Aurora Cannabis. The two conditions are (1) broad stock markets with the Russell 2000 index as the leading indicator must continue to rise (2) Aurora Cannabis must avoid a breakdown below its rising support. If this is about to happen we know for sure that Aurora Cannabis is a cannabis stock to buy in 2019!