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Cannabis Stock Price Analysis - HEXO Corp and Emerald Health Therapeutics


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HEXO Corp (HYYDF) has a few things going for it, and unlike TIlray (whose stocks parabolic gain last week shot up as fast as it crashed back down before the weekend), HEXOs stock price hasnt quite reached such overvalued levels. HEXO is one of two cannabis growers who will be partnering with the Molson Coors Brewing Company to develop pot-infused beverages. With its current capacity to produce 108,000 kilos of cannabis per year, HEXO is zeroing in on securing a 35% market share of recreational cannabis in Quebec, in addition to capitalizing on its supply agreements in Ontario and British Columbia. Lets take a look at its current price action.

HYYDF

Following a two-month trading range, we see HEXO breaking out upon the Molson Coors announcement in late August and its subsequent follow-through in early September (1). Having reached a swing high at (2) at the price of 6.87, we see it establishing a swing-low (3), rebounding off the 5.17 price level. Based on a strict price action model, an uptrend bias would have expected the following swing high to exceed the former, which it did at (4) but was rather muted. Following the sell-off, having reached a high of 7.02 on Sept 19, the three following sessions, comprised of spinning tops suggest indecision, and you can see the dwindling in volume supporting such market action. An uptrend bias would see price breaking above the current swing high, preferably not breaking below current support at 5.96.

Resistance: 7.02

Support: 5.96

Trend:Up

Emerald Health Therapeutics (EMHTF):
EMHTF

Here we actually see a clear symmetrical triangle pattern for whatever thats worth. Technically, a pattern breakout would signify a bullish or bearish bias depending on the direction of the breakout and the volume supporting such a move. Currently, in the process of retrofitting its 1.1 million sq ft production facility, Emerald is positioned to take advantage of both the Canadian recreational market and global medical cannabis market. However, its lack of supply agreements (its only one with the British Columbia Liquor Distribution Branch) may stand in the way of allowing Emerald to compete for a larger share within its domestic market. The same can be said for Emeralds global prospects.

Resistance: 4.49

Support: 3.30

Trend: Up

To follow the latest analysis and news on cannabis stocks, check out our blog at www.halifaxamerica.com or sign up for our weekly newsletter by sending an email to info@halifaxamerica.com.


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About the author


Karl Montevirgen is an independent content writer who specializes in finance and emerging (disruptive) industries. Having been involved in the commodities and FX markets for the last 9 years, Karl writes for several companies and publications in the finance, blockchain, cannabis, and content space. 

You can view his extended profile, list of publications, and theoretical content work on his LinkedIn page. 

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