ACB Stock Price: Aurora Cannabis inc may rise as coronavirus fears may trigger recession
- Aurora Cannabis stocks are sliding along with broader markets.
- A recession may eventually benefit marijuana stocks.
- Monday's four-hour chart is pointing to moderate declines below $2.40 resistance.
Stock markets are taking the recent coronavirus news from Italy on the chin. The sizeable European country reported a substantial cluster of cases and seven deaths, exacerbating market fears. Investors are concerned with the economic impact of even cancelations and plant shutdowns in Europe and in Asia.
Aurora Cannabis is not immune to the general market sell-off and is now trading around C$2.13, down 3.85%, in line with broader markets. The Edmonton-based firm has suffered major unrelated drops in revenue, the ouster of its CEO, and impairment charges.
The coronavirus – and mostly fears related to it – may trigger a recession in various countries. While a downturn leaves fewer dollars' of disposable income for recreational drugs, it also elevates the need for conscience-alleviating substances. Those that are in financial distress may turn to weed to divert attention from their troubles. This may affect sales in North America and beyond.
Shares of pot stocks have room to run higher – assuming they get things right. Will Aurora be one of those companies to come stronger out of an economic slump? That remains an open question.
Aurora Cannabis Stock Price
The four TSX: ACB chart is pointing to upside momentum for the stock price despite edging lower. On the other hand, the picture remains bearish as long as it trades below 2.40, which has initially worked as support and then as resistance. Moreover, it is where the 50 Simple Moving Average hits the price.
Support awaits at $1.90, the all-time low and above $2.40, the next cap is at $3.05.
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
