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It’s been a rough year for cannabis stocks and even though Aurora Cannabis (NYSE: ACB) is one of the most notable companies in the Cannabis sector, it had its fair share of struggles in year 2019.

Aurora Cannabis Inc high odds for longs

The stock has been dropping strongly for many months since April 2019. Following that yearlong downtrend, here are a few reasons to consider buying Aurora’s stock in 2020 based. Remember we only trade supply and demand imbalances, we are not interested in fundamentals for this particular cannabis stock.

We don’t care if the company could bring in a new CEO to negotiate a deal to bring consumer packaged goods to the company and bring greater financial discipline to the company. We could start adding fundamental analysis and why Aurora Cannabis hasn’t done very well last year.

Who cares about all that? What we should care is about the super strong monthly demand imbalance that price has reaches after months of continuous devaluation of the stock. As supply and demand traders we should only be interested in trading strong imbalances, price levels where the underlying asset is out of balance.

See Aurora Cannabis ACB stock monthly timeframe supply and demand analysis underneath. We can see a very strong monthly demand level around $2.15 per share. It’s a very strong impulse that provides us with a lot margin for price if price reacts to that imbalance as expected.

Aurora Cannabis chart analysis

Reasons to buy Aurora Cannabis ACB stock
Reasons to buy Aurora Cannabis ACB stock

If you love fundamental analysis, I’ve read that Management has reconfirmed December quarter guidance and is confident of a sales ramp-up, bringing down capital expenditures, and estimating the company will deliver positive EBITDA by the June quarter.

Will that happen? We don’t know and we do not really care. What we do care is the strong monthly demand imbalance price is trading at around $2.15. Not only that, this stock is very cheap right now, a 100 shares of this stock would cost about $200, it’s a bargain willing to buy and hold for many months until a decent profit has been obtained.

More about Aurora Cannabis ACB stock

Aurora Cannabis Inc. is a Canadian licensed cannabis producer, headquartered in Edmonton. It trades on the Toronto Stock Exchange and New York Stock Exchange as ACB. As of late September 2018, Aurora Cannabis had eight licensed production facilities, five sales licences, and operations in 25 countries.

Alfonso Moreno
Alfonso Moreno
Full time trader, expert technical analyst and founder of Set and Forget supply and demand online trading community. Traveler, photographer and adventurer.

3 Comments

  1. Randy Bicknell says:

    Fully agree, However, taking it a step further fundamentals are set to improve massively resulting in much more fuel to the imbalance fire. I think it’s the misinformation on current fundamentals, coinciding with the perfect storm of industry dynamics with a down trend followed by a massive uptrend that have created this imbalance at the perfect time. Years of higher valuations have been exchanged because what we will see In 2020 and yet we are now at 3 yr low prices. Wow

  2. Carlos says:

    Buying today with the dip further down toward the bottom of the demand box for the long into earnings tomorrow. I see a lot of times where a stock or FX goes the opposite direction leading into news and then goes our way after the news. It may be uncomfortable to buy when everyone seems to be selling or when the indices has been going hard in the opposite direction, but we have the edge of major supply and demand areas to lean on. So, what happens if I’m wrong at a sup/dem level? If price gets through the opposite way of my sup/dem level I just go the other way with it using the same lot/stock size because, from experience, I know if it’s strong enough to make it all the way through and out the opposite side of my level, then it’s strong enough to keep going long enough to get 1 to 11x what I lost when I was wrong.

    • The level is strong, it can be overshot of course. But this is a cheap stock, it’s a long term position to hold over months. Your loss is less than $200 per 100 shares, it can’t go further down than $0

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