Canopy Growth Corp. (NASDAQ: CGC) and Tilray Brands Inc. (NASDAQ: TLRY) were plunging over 13% and 11%, respectively, at one point Friday after skyrocketing on Thursday.
When President Joe Biden announced plans to pardon all who have been federally convicted of marijuana possession, and those who have been convicted in Washington, DC., prices soared.
The move comes as the midterm elections near, where at least five states have legalization of adult-use cannabis on the ballot.
Related Link: Biden Pardons All Federal Marijuana Possession Convictions
Up to now, 41 states, the District of Columbia and Puerto Rico have medical marijuana programs in place and 23 have either decriminalized cannabis or legalized marijuana for adult use.
Thursday’s surging prices in the cannabis sector didn’t appear to be holding, however, despite the news. When a stock moves in either direction too quickly, a retracement becomes the most likely scenario but the higher prices on Thursday further confirmed both Canopy Growth and Tilray are trading in uptrends.
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The Canopy Growth Chart: Canopy Growth reversed into an uptrend on Sept. 23. The stock’s most recent higher low within the pattern was formed on Thursday at $2.92 and the most recent higher high was printed at the $3.83 mark on that same day.
- On Friday, the Smiths Falls, Canada-based company was printing an inside bar, with all the price action taking place within Thursday’s trading range. The pattern leans bullish in this case because the stock was trading higher before forming the inside bar, but traders can watch for a break up or down from Thursday’s mother bar on higher-than-average volume to indicate future direction.
- Canopy Growth has resistance above at $3.24 and $3.83 and support below at $2.70 and $2.16.
The stock temporarily broke down below the 50-day simple moving average (SMA), but the bulls propped the stock back up above the level, which is a good sign for the bulls.
- Like Canopy Growth, New York-based Tilray reversed into an uptrend on Sept. 23, with the most recent higher low formed on Wednesday at $2.83 and the most recent higher high printed at the $4.09 mark on Friday. If the stock closes Friday’s session above the 50-day SMA, with a lower wick, Friday’s low-of-day may become the next higher low within the pattern.
- Tilray has resistance above at $3.61 and $4.21 and support below at $3.02 and $2.43.
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