Cronos Group - Bullish Side Remains Intact

Cronos Group (Nasdaq: CRON) is an innovative global cannabis company based in Canada. It's one of the largest medical marijuana producer around the world and it was the first cannabis company to be listed on the Nasdaq stock market last year.

Today, the company announced its fourth-quarter and full-year 2018 financial results before the market opens. It posted gross profit before fair value adjustments of CA$2.5 million which is up 449% year over year. However, the company announced a fourth-quarter loss of CA$11.8 million compared to a profit of CA$667,000 in the prior-year period.

The stock is down 2.75% for the day and could be still looking for further losses in the coming days. Is this a start of a larger correction or the bullish cycle will remain intact?

To understand the current situation we need to take a look at the technical chart of CRON with the help of the Elliott Wave Theory:

CRON Daily Chart

(Click on image to enlarge)

CRON Daily 3.26

Since IPO, CRON is proposed to be advancing in impulsive waves as the stock keeps making higher highs and lower lows with enough separation. At the current stage, it ended the red wave III cycle from October 2018 low and therefore a correction is taking place in a 3 waves Zigzag structure.

The correction in wave IV can reach the extreme blue box area at $17.9 - $16.4 from where the stock will be able to rally again to new all-time highs or bounce in 3 waves at least. However, to be able to rally higher, CRON shouldn't do an overlap with September 2018 peak at $15.2 which would invalidate the impulsive structure.

Consequently, the bullish trend looks to be intact at this stage and the pullback would represent another buying opportunity for investors to continue riding the Long side.

 

 

Disclaimer: Futures, options, and over the counter foreign exchange products may involve substantial risk and may not be suitable for all investors. Leverage can work against you as well as for ...

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