High probability bearish signal on Cronos Group (CRON)
Cronos Group (Nasdaq: CRON) is a rather unique company. It is considered a healthcare company as far as its sector designation, but it considers itself to be an investment firm that invests in medical marijuana companies. Cannabis investing has been a prominent storyline over the last few years and that has helped the stock move up sharply in the last two years.
Despite the rally, the stock has been trending lower in the last four and a half months. A trend channel has formed that defines the cycles within the overall trend. This channel is different in the way that I drew it because it was the lower rail that stood out to me first. I connected the lows from February, March, April, and May to form the lower rail. I then drew a parallel line and used the high from March as the starting point. What we see on the chart below is that the stock just hit the upper rail of the channel and then turned lower.
We see that the stock was overbought based on the daily stochastic readings, but the indicators turned lower and made a bearish crossover on June 13.
The Tickeron Trend Prediction Engine generated a bearish signal on the same day as the stochastics crossover. The signal showed a confidence level of 89% and past predictions on the stock have been successful 88% of the time. The signal calls for a drop of at least 4% over the next month.
CRON in downward trend: 10-day moving average moved below 50-day moving average on November 05, 2024
The 10-day moving average for CRON crossed bearishly below the 50-day moving average on November 05, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on December 06, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on CRON as a result. In of 113 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for CRON turned negative on December 04, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 52 similar instances when the indicator turned negative. In of the 52 cases the stock turned lower in the days that followed. This puts the odds of success at .
CRON moved below its 50-day moving average on November 13, 2024 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CRON declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 4 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where CRON advanced for three days, in of 213 cases, the price rose further within the following month. The odds of a continued upward trend are .
CRON may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. CRON’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.912) is normal, around the industry mean (58.702). P/E Ratio (0.000) is within average values for comparable stocks, (89.727). CRON's Projected Growth (PEG Ratio) (0.000) is slightly lower than the industry average of (2.947). Dividend Yield (0.000) settles around the average of (0.122) among similar stocks. P/S Ratio (11.481) is also within normal values, averaging (19.450).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CRON’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 91, placing this stock worse than average.
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General Information
pharmaceutical, medical marijuana, cannabis
Industry PharmaceuticalsOther