Aurora Cannabis Inc.

Aurora Cannabis Inc. (NASDAQ: ACB) is a Canada-based medical cannabis company. The Company's principal business lines are focused on the production, distribution and sale of cannabis and cannabis derivative products in Canada and internationally. Its segments include Canadian Cannabis, International Cannabis and Bevo.

Recent Business Updates:

• Bipartisan SAFE banking bill reintroduced: The Secure and Fair Enforcement (SAFE) Banking Act is a proposed legislation aimed at securing crucial banking and financial services for legitimate marijuana businesses while safeguarding financial institutions against potential sanctions from federal authorities for dealing with them. The reintroduction of the SAFE Banking Act is seen as a significant initial move towards the eventual legalization of cannabis.
• Expands Medical Cannabis Portfolio in Germany: With the introduction of two new medical cannabis flower products in Germany, Aurora Cannabis Inc. announced the extension of its product line. Tetrahydrocannabinol (THC) concentration is high in the dried cannabis flowers known as Pedanios 27/1 FRG CA and Pedanios 29/1 SRD CA. The Company will more effectively satisfy the unique medical demands of its patients now that these new treatment choices are readily available.
• Repurchases ~CAD 22 Million Principal Amount of Convertible Notes: As of the beginning of April 2023, Aurora Cannabis Inc. reported that it had repurchased a total of approximately CAD 22.3 million (USD 16.6 million) in principal amount of its convertible senior notes in a number of transactions for a total cash cost of CAD 16.7 million (USD 12.4 million), including accrued interest, and CAD 5.3 million (USD 4.0 million), including accrued interest, satisfied by the issuance of a total of 6.35 million common shares of Aurora. These trades will save Aurora 2.6 million Canadian dollars in annualized interest costs. After these repurchases are finished, Aurora will have about CAD 79 million (USD 59 million) worth of Notes outstanding.

Technical Observation (on the daily chart)

With a past year correction of almost -80.21%, the price has been in a persistent downward trend over the long run. The price has corrected further by around 39.80% since its Q2FY23 results announcement on February 09, 2023. Also, the momentum indicator RSI (14 period) displays a value of 36.72, suggesting a further consolidation or a short-term relief rally. Price is also below the 21-day SMA and 50-day SMA trend-following indicators, which can serve as dynamic short-term resistances.

As per the above-mentioned price action, recent business updates, Q2FY23 results, expectations of passing of SAFE Banking bill and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Aurora Cannabis Inc. at the current price of USD 0.60 as of May 01, 2023, at 07:15 am PDT.

 Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is May 01, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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