CRON on a downtrend, RSI Cooling, MACD Divergence
This could be the first leg of a bearish divergence, with multiple signals showing signs of buyer exhaustion. The hype that pushed CRON to these levels violates all fundamentals, and was doomed for a sharp sell-off. The MACD is diverged on the daily, and without a catalyst would signal a further sell-off. Ichimoku base-line was breached today and the small gap from last week's rally filled. The base-line would either be a good entry point for tomorrow, or further downtrend would signal the next entry point at the top of the signal line on the cloud.
I'm looking for a potential attempted green day tomorrow morning from die-hard bulls, followed by a further sell-off approaching the 17.5 range by Friday. If this occurs, seller exhaustion could trigger a short-term day trader's rally next week that would further confirm the bearish divergence if volume doesn't hold out. It all depends on expectation of earnings and other new catalysts, but there's a lot of negatives now weighing in with the overall sector.
How hard of a sell-off tomorrow is determined by sentiment, but with everything going on the past two months I would watch out for entering any new positions in CRON (or in any of the MJ's for that matter) now. Take some profits or average down if you're in it for the long game.
I'm looking for a potential attempted green day tomorrow morning from die-hard bulls, followed by a further sell-off approaching the 17.5 range by Friday. If this occurs, seller exhaustion could trigger a short-term day trader's rally next week that would further confirm the bearish divergence if volume doesn't hold out. It all depends on expectation of earnings and other new catalysts, but there's a lot of negatives now weighing in with the overall sector.
How hard of a sell-off tomorrow is determined by sentiment, but with everything going on the past two months I would watch out for entering any new positions in CRON (or in any of the MJ's for that matter) now. Take some profits or average down if you're in it for the long game.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.