CRON - Bearish signals flashing
With the delayed then delayed again earnings report, and a release of news today on selling of their stake in Whistler to ACB, I have to ask myself "Why? Why would a company take this sort of action while preparing a balance sheet?".
This setup could be the “fake and break” where large funds have pushed a stock to new highs, sucked in the retail crowd, and could now begin unloading shares. What do we know about CRON and the MA deal? The price of the offering was $12.25 per share. After this announcement and the recover rally in January, CRON skyrocketed deep into overbought territory. Just pick any day on StockTwits and read the bullish craze and hysteria flowing through the forum. I want people to succeed, but stepping back from this situation objectively there are a variety of red flags to consider.
Professional analysts reduced the weighting on the stock last week. Looking at the fundamentals and looking at the technicals below, I’d be very very cautious purchasing at these levels. Given the market volatility today, and the sell the news mentality that could shift this rally into correction, I’m setting up for another short. Especially act cautiously if there's another signal from the major indices. Watch for chop and wait for confirmation, but be prepared for anything.
Technicals:
This setup could be the “fake and break” where large funds have pushed a stock to new highs, sucked in the retail crowd, and could now begin unloading shares. What do we know about CRON and the MA deal? The price of the offering was $12.25 per share. After this announcement and the recover rally in January, CRON skyrocketed deep into overbought territory. Just pick any day on StockTwits and read the bullish craze and hysteria flowing through the forum. I want people to succeed, but stepping back from this situation objectively there are a variety of red flags to consider.
Professional analysts reduced the weighting on the stock last week. Looking at the fundamentals and looking at the technicals below, I’d be very very cautious purchasing at these levels. Given the market volatility today, and the sell the news mentality that could shift this rally into correction, I’m setting up for another short. Especially act cautiously if there's another signal from the major indices. Watch for chop and wait for confirmation, but be prepared for anything.
Technicals:
- Elliot correction wave, final wave down before the next impulse
- Bearish Divergence on Volume
- Bearish Divergence on RSI
- MACD Sloping down with increase in bearish histogram
- Stochastic crossover developing on the daily after 3/4
- Squeeze indicator (although spotty accuracy) showing bearish turn as of 3/4
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