CGC: Post-Breakout Shakeout Into Support Sets Up a Buy-the-Dip Rebound

Overview and key observation

• Symbol: CGC (Canopy Growth)
• Latest daily close: 1.80 (Aug 29 regular session). Intraday/extended shows a post-close print near 1.63 after a volatile 1.54–1.81 range late in the day. There is a data discrepancy between “currentPrice 1.80” and extended-hours last 1.63; I treat 1.61–1.66 as the key pullback zone and 1.85–1.93 as near-term resistance. Plan accommodates both RTH and extended-hours liquidity.
• Narrative: Since early August, CGC staged a high-volume trend reversal from ~1.02 to ~1.93 (Aug 28), then consolidated Aug 29 with a shakeout into the 1.60s. Structure remains bullish unless the 1.50–1.52 area breaks decisively.

Multi-timeframe trend structure

• Daily trend: Up. Higher highs/lows since mid-Aug recovery from 1.21 to 1.88/1.93 with strong breadth. Price sits above rising short and intermediate MAs (10/20/50D). Pullback looks like a bullish pause after a breakout day (Aug 28).
• 4H/1H: Breakout, then mean reversion toward VWAP/pivot followed by base-building around 1.73–1.80 intraday, with late-session flush to S1 (~1.61). That intraday structure often precedes a rebound test toward highs if higher-timeframe trend is intact.
• Market structure: Potential cup-and-handle from July into mid-Aug with a handle low ~1.21 and breakout to new swing highs. Current retreat resembles a handle retest/Fibonacci pullback inside a still-bullish regime.

Key levels and confluence

• Resistance: 1.88–1.93 (Aug 28 high cluster), then psychological 2.00 and May swing zone 1.99–2.00. Above 2.00 opens momentum extension.
• Support: 1.70–1.75 (intraday base), 1.61–1.63 (pivot S1 and 38.2% retrace), 1.50–1.52 (50% retrace/volume shelf), 1.47–1.50 (prior pivot), 1.33 (deeper structure).
• Fibonacci (swing Aug 20 low ~1.21 to Aug 28 high ~1.88):
  • 23.6% ~1.72
  • 38.2% ~1.62 (post-close prints kissed this level)
  • 50% ~1.545 (the 1.54 low in extended hours tags it)
  • 61.8% ~1.47 (next downside if 1.54 fails)
• Classic floor pivots from Aug 28 (H 1.93, L 1.50, C 1.88):
  • P ≈ 1.77, R1 ≈ 2.04, S1 ≈ 1.61, R2 ≈ 2.20, S2 ≈ 1.34
  • Aug 29 traded around P during RTH and tested S1 after hours, a typical bullish-retest behavior if trend persists.

Momentum and trend indicators

• RSI (14D, est.): High 60s to low 70s after Aug 28’s surge; cooled slightly on Aug 29. Net: bullish with some overbought relief.
• MACD (12,26,9D): Above zero with a positive signal cross from mid-Aug; histogram likely narrowed on Aug 29. Net: trend-positive, momentum consolidating.
• Stochastic (14,3,3D): Pulled down from overbought, curling in mid/high zone; set up for another push if price holds above 1.60s.
• ADX (D): Rising and likely >25, confirming a trend present; +DI above –DI.
• Ichimoku (D): Price > cloud, bullish TK cross; bullish bias while >Kijun (likely ~1.55–1.60) and cloud top (>1.40s).

Volatility and bands

• ATR (14D): Elevated, ~0.15–0.20, consistent with the wide ranges; expect 8–12% daily swings.
• Bollinger Bands (20D): Bands expanded on Aug 28; Aug 29 tagged upper band and reverted toward middle. Current price is between mid and upper band, not a breakdown.
• Keltner Channels: Price pulled back from upper channel toward midline, typical post-breakout digestion.
• Donchian (20D): Near-channel highs; trend-following signals remain long while above mid-channel (~1.53).

Volume, participation, and flow

• Volume: Massive expansion Aug 28 (62.9M) and still strong Aug 29 (37.7M). Prior sessions also showed persistent participation since Aug 8. Healthy liqudity.
• OBV/Accum-Distribution (qualitative): Rising since late Aug; Aug 29 churn likely distribution-neutral as price held well above mid-Aug lows.
• VWAP (Aug 29 RTH): Likely ~1.76–1.78. Price oscillated around VWAP most of the day, then dropped post-close to S1—typical liquidity sweep. A VWAP reclaim on next session often triggers momentum back to 1.85–1.90.

Pattern diagnostics

• Breakout-and-flag: Aug 28 wide-range breakout; Aug 29 forms a high-and-tight flag with a liquidity sweep to S1 and into 38.2–50% Fib. Such pullbacks are typically buyable if reclaimed quickly.
• Candle context:
  • Aug 28: Wide-range bull close near highs.
  • Aug 29: Spinning-top/doji intraday, then extended-hours lower close around 1.63 with a long lower tail to ~1.54—resembles a shakeout.

Statistical/mean-reversion context

• Z-score vs 20D mean likely 1.0–1.5 after Aug 28; a one-day cooldown reduces overextension, increasing odds of a second push toward prior highs in the next 1–2 sessions if support holds.

Risk and invalidation

• Invalidation of bullish thesis: Sustained trade below 1.52 (50% retrace and near Kijun/volume shelf) would increase risk of deeper pullback to 1.47 and 1.33. Until then, dip-buyers have the upper hand.

Next 24-hour outlook and path probabilities

• Base case (55%): Hold/reclaim above 1.70–1.75 early, VWAP reclaim, drive to 1.85–1.90, probe 1.93. Range ~1.62–1.92. Close nearer 1.84–1.90 if momentum persists.
• Bear/dip extension (25%): Early liquidity sweep to 1.58–1.62, quick rejection higher; still closes >1.72. This is the preferred buy-the-dip zone.
• Bear continuation (20%): Break and hold below 1.52 triggers run to 1.47; trend would be at risk and we reassess.

Toolkit cross-checks and how they impact price view

• Moving averages: Price above rising 10/20/50D MAs; pullbacks to 20D (~1.45–1.50 est.) are still higher lows; favors buying dips.
• Fibonacci: 38.2–50% retrace caught; classic continuation zone.
• Pivots: S1 ~1.61 tagged; bounce potential toward pivot P ~1.77 and R1 ~2.04.
• Bollinger/Keltner: Post-surge mean reversion achieved; room exists to re-expand upward.
• MACD/RSI/ADX: Trend intact with momentum consolidation; supports another leg higher if price holds >1.60–1.65.
• Volume/OBV: Accumulation bias; strong participation provides fuel for breakout retests.
• VWAP: Reclaiming and holding above session VWAP typically triggers follow-through to prior highs in momentum names.

Trade plan and execution details

• Bias: Buy dips into 1.62–1.67 zone with a stop below 1.52; alternate is momentum add on break and hold above 1.86.
• Rationale for entry level: 1.66 sits inside the 38.2–50% Fib cluster (1.62–1.55) and near S1 (1.61), offering a high R:R: risk ~0.14 vs reward to 1.92–1.95 (~0.26–0.29).
• Profit target: 1.92, just under the 1.93 swing high and below the 2.00 psychological wall to front-run overhead supply.
• Expected range next session: 1.60–1.92 with bullish skew; best entries often occur premarket/open flushes into 1.62–1.67.

Bottom line

• The broader setup remains bullish after a powerful breakout. The extended-hours sweep into the 1.60s aligns with textbook Fib/pivot support and appears to be a shakeout. I favor a long entry on a dip toward 1.66 with a target near 1.92 over the next 24 hours, contingent on holding above 1.52.