The decline adds to the stock's summertime woes: The shares have slid more than 27% over the past three months, and they're down in seven of the past eight weeks.
Making matters worse, GW Pharma is starting off the week by breaking through a significant level of support.
It doesn't help that many investors consider GW Pharma one of the early cannabis plays in the stock market.
Should support give way for GW Pharma, investors should be aware of a few downside targets, as well as a few upside targets, should it rebound.
Let's look at the charts.
Trading GW Pharma Stock
As the weekly chart above shows, the ride for GW Pharma stock has been rough. Downtrend resistance (blue line) squeezed the shares lower in the second quarter, but the bottom fell out in Q3.
The 50-week moving average initially buoyed the stock, but once it failed as support in August, it acted as resistance in September. This is not a good development for investors in the stock.
With Monday's decline, the stock is breaking below last week's lows at $127, as well as moving below the $130 mark. That $130 level has proved significant over the past three years, acting as both support and resistance in that time.
Further, the 38.2% retracement for the one-year range is at $130.58. Finally, an uptrend line is at play near this level (shown in purple).
If GWPH stock is able to quickly recover this area, ending the week above $130, then a reversal could be brewing.
If so, look at the declining 10-week moving average and the 50% retracement near $143 as two upside targets.
If GW Pharma stock fails to reclaim the $130 level, more downside could ensue. The first downside target to watch is the 200-week moving average, currently $120.50. Below that and the 23.6% retracement is at $115. Finally, $100 or lower could be on the table if buyers don't step in amid the decline.
My concern on the downside is that the 200-week moving average may not act as support.
It did little to ease the selling pressure amid the Q4 meltdown last year, and while that was a very volatile period, last year's test does little to inspire confidence.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.