Canopy Growth corporation is planning a $300m acquisition of Acreage Holdings in what is the biggest Marijuana acquisition of all time. The potential acquisition dependent on U.S. Congress changing laws to legalize the sale of marijuana across the US presents large long term upside potential for the stock. However, as with our analysis on Aurora Cannabis we advise the stock be traded with caution as it is very volatile but volatility is dropping as shown by the ATR.
The stock was in a significant downtrend from all time highs as prices hugged the lower Bollinger Band but the downtrend reversed in Jan 19 as prices moved away from the lower band. There has been some weakness in prices over the past couple of months but they have broken out with potential to go back up towards Oct 18 highs at around $59. Additionally the 50 day moving average crossed the 100 day moving average which is a very bullish signal but we would nevertheless start building a long position with caution mainly due to regulatory uncertainty.
The stock was in a significant downtrend from all time highs as prices hugged the lower Bollinger Band but the downtrend reversed in Jan 19 as prices moved away from the lower band. There has been some weakness in prices over the past couple of months but they have broken out with potential to go back up towards Oct 18 highs at around $59. Additionally the 50 day moving average crossed the 100 day moving average which is a very bullish signal but we would nevertheless start building a long position with caution mainly due to regulatory uncertainty.