What's Next As Aurora Cannabis Is Nearing The Breakout Point Of A Pennant Pattern

Aurora Cannabis Inc. ACB shares are trading lower Wednesday after retail traders were able to push the stock lower. Senate Majority leader Chuck Schumer just proposed ending federal prohibition on cannabis in the U.S. Senate.

The stock was trending throughout the day on social media sites such as StockTwits.

Aurora Cannabis was down 10.27% at $7.51 at last check Wednesday afternoon.

Aurora Cannabis Daily Chart Analysis

• Shares are forming into what technical traders would call a pennant pattern and could break out within the coming weeks.
• The stock is trading below both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock has recently faced bearish sentiment.
• Each of these moving averages may act as resistance in the future.

Key Aurora Cannabis Levels To Watch

• The pennant pattern began forming in November 2020, and may see a breakout within the next couple of weeks if pattern resistance can be broken.
• The price will likely continue to be condensed between narrowing highs and lows until the stock is able to break above the pattern support or resistance and possibly see a strong move in the same direction.
• The Relative Strength Index (RSI) has been falling lately and sits below 50. The RSI is sitting at 33 meaning that there are more sellers in the stock than there are buyers. This indicator is nearing the oversold level that begins at 30 and goes down to 0.

What’s Next For Aurora Cannabis?

Bulls would like to see the stock continue to trade within the pennant pattern until it is able to break above pattern resistance. Breaking above pattern resistance could mean that the stock sees a further bullish push.

Bears would like to see the stock break below the pattern support. If pattern support is broken the stock may see a dropoff. Bears would like the stock to continue to trade below the moving averages to maintain bearish sentiment.