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Shares of Canopy Growth (CGC) took it on the chin Thursday, following a worse-than-expected earnings report.

The stock closed lower by 14.4% at $27.34.

It's the stock's lowest level this year as sentiment toward cannabis stocks has turned bearish.

Not helping matters is that these high-valuation stocks must trek through a period of heightened volatility in the overall stock market. Add to this the earnings report from and subsequent fall in Tilray (TLRY)  this week.

Despite the fall in Canopy Growth, Constellation Brands (STZ)  shares aren't hurting much, even as the company holds an ~40% stake in the company. 

Canopy reported a loss per share of $3.70, widely missing estimates calling for a loss of 41 cents. The losses are tied mostly to extinguishing warrants with Constellation Brands. Management did not provide earnings on an adjusted basis.

Revenue of C$90.5 million also missed the mark, missing estimates by more than $21 million. Between that and the muddy earnings figure, it's caused enough concern among investors to sell first and ask questions later.

Let's look at the charts to see when the bulls might be out of the woods.

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Trading Canopy Growth Stock

Daily chart of Canopy Growth stock.

When support gave way in July, that was the all-clear call to traders to throw in the towel on Canopy Growth stock. Since then, CGC stock has been locked in a brutal downtrend, highlighted by its downward channel (purple lines).

So far on Thursday, Canopy Growth stock is below channel support. Short of shares putting together a late-session rally and reclaiming the ~$29 mark, a close below this trend does not bode well for future prices in the short term. 

That has traders looking at possible downside targets.

Uptrend support (blue line) connects back to all three of Canopy's major lows dating back 13 months. The idea that this level will hold as support seems -- at least to me -- flimsy at best. This level would prove itself as support if shares were to break below and quickly reclaim this mark, or hold it at its lows.

Given the climate in both the overall market and the cannabis industry, though, I'm not inclined to dip my toe in on the basis of hope.

So what should investors do? I want to see Canopy Growth stock either reclaim prior downtrend support or for range support at $25 to hold on a further decline. Should shares fall further and bottom out near this mark, it may make for a worthwhile risk/reward.

If it fails to hold, new 52-week lows may be in store for this cannabis stock. 

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.