Canopy Growth (NYSE: CGC) Bullish Cycle in Progress

Canopy Growth Corporation CGC, formerly known as Tweed Marijuana, became the world’s largest cannabis company in late September 2018, based on market capitalization.

Since last December, CGC has seen a strong rally achieving 90% gains in just 2 months before starting a correction lower. So before we jump to any conclusions, let’s take a look at the bigger picture:

CGC Weekly Chart 4/1/2019

In the above chart, we can see that CGC rallied in an impulsive 5 waves advance since the IPO, proposed to be the first wave (I), and that cycle ended in October of last year at the $59.25 peak. Then down from there, the stock corrected the entire cycle lower in a classical 3 waves zigzag structure which ended in December 2018 at $25.

Therefore, the stock is technically trapped between these two levels, and only a break above the 2018 peak will be the key to start a new bullish cycle. At this stage, a double correction in wave (II) isn’t denied yet, but the rally from the December low is suggesting a new impulsive structure taking place supporting the bullish scenario.

CGC Monthly Chart 4/1/2019

Making new all time highs will be the start of a new incomplete bullish sequence for CGC. Consequently, the stock will be aiming for a minimum target at the 100% Fibonacci extension level at $83.84, and higher levels above $100 will follow. So based on that assumption, investors will be looking to buy any pullback in 3 , 7 or 11 swings against the 2018 low.

Now that we’ve established the main trend for the stock, we can take a look at the daily chart and explore the potential moves that can take place in the coming weeks:

CGC Daily Chart 4/1/2019

Currently, CGC is proposed to be doing a double three corrective structure since the February 2019 peak which is ideally expected to find buyers at extreme blue box area $39.7 – $33.45 for a 3 waves bounce at least. However, if the stock fails to rally to new highs from there, another double correction can take place against $25 before ending wave II and turning higher.

CGC Daily Alternative Chart 4/1/2019

Conclusion

Canopy Growth Corporation is a bullish stock, and it’s looking to remain supported against the December 2018 low of $25. The stock still needs to break above the 2018 peak to open the door for higher levels.