Shares of Canopy Growth (CGC) broke out of a tight trading range today on strong volume. The stock chart breakout occurred after Canopy Growth surged through resistance at $21.65 today. This indicates a major up-move coming and some positive news. Constellation Brands (STZ) already owns a large chunk of Canopy Growth and speculation is they will buy the whole company. The whole marijuana sector has been under insane pressure with stocks like Aurora Cannabis Inc (ACB) hitting a new multi-year low in early trading. Most other companies like Tilray (TLRY) and Cronus (CRON) are near multi-year lows as well.
The marijuana sector is signaling a short squeeze as indicators are extremely oversold. This trigger may be the breakout on Canopy Growth today. Short covering and buying pressure will likely build as any chance of a Democratic president will lead to legalization hopes. In addition, downgrades and bearish sentiment have gotten overdone. A natural snap back can lead to 50% upside in these names.
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The Canopy Growth stock chart breakout can be seen in the image below.