Cronos Attempts Breakout Amid Rising Cannabis Demand
Cronos Group Inc. CRON) shares rose more than 2% during Friday’s session as cannabis stocks recouped some of the losses they posted over the past month. While some dispensaries have been forced to close their physical locations, others have remained open, and there’s evidence that cannabis sales and deliveries are on the rise in many states.
California exempted cannabis facilities from its COVID-19 lockdown that has shut down most other businesses across the state. The same is true in Nevada, where cannabis businesses weren’t listed among the “non-essential” services. Companies in both states have experienced strong demand throughout the crisis as consumers are forced to stay home.
The market will also be keeping an eye on Cronos Group’s earnings report due out on Wednesday, March 25, 2020.
From a technical standpoint, the stock rose toward trendline resistance and the 50-day moving average at $6.75 over the past few sessions. The relative strength index (RSI) remains neutral with a reading of 50.43, but the moving average convergence divergence (MACD) experienced a bullish crossover. These indicators suggest that the stock could see further upside.
Traders should watch for a breakout from these levels toward reaction highs of around $9.00 or the 200-day moving average at $9.77. If the stock fails to break out, traders could see a move toward reaction lows of $4.00. Trendline resistance remains robust at around $6.25, but technical indicators point to an increasingly bullish move to test that level.
Next week’s earnings will likely be a key driver of price action along with ongoing sales trends as other states join California in implementing lockdowns on businesses.
The author holds no position in the stock(s) mentioned except through passively managed index funds.