Last week Aurora Cannabis reported a loss for the fourth-quarter that was larger than expected and revenue that was short of estimates. As a result, the stock has been crushed over the past week. It dropped from $6.50 to $5.30.

Making matters worse for shareholders of ACB, Stifel Nicholas downgraded the stock from “hold” to “sell”. The analyst at Stifel said that the company will need to have a large cash raise to continue to fund its operations, and this will be difficult to do considering the negative sentiment in the industry.

If the stock rallies, look for some resistance around the $5.50 level. This level was support at the end of August and in early September. Support become resistance because the people who bought it at $5.50 are now losing money because the stock is lower. They tell themselves that if it rallies back to $5.50 they will sell it so they can get out of the position without losing money. This abundance of sell orders at the level is what creates resistance.

If it continues to trade lower it may find support around the $5 level. This is because this level was where the lows were in December. It is also an important psychologically.  If ACB is oversold when it reaches that level, there is a good chance that it will be a low-risk buying opportunity.

Wall Street Daily  - Aurora Cannabis Hits Wall With Rev Miss - Wall St Hits Stock