Sundial producers near the end of a model … breakout potentially pushes it higher

Sundial Growers Inc. (NASDAQ: SNDL) Shares rose Wednesday morning and have since fallen after the company released its earnings report on Tuesday.

The company reported a profit of $ 1.7 million compared to a loss of $ 32.7 million in the prior quarter. The company reported EBITDA of $ 3.3 million compared to the previous quarter’s EBITDA with a loss of $ 5.6 million.

Sundial Growers was down 5.01% to $ 0.70 in the last check on Wednesday afternoon.

Analysis of the daily chart of sundial producers:

  • Sundial Growers recently broke below the potential support level near the $ 1 area and is trading in what technical traders might call a falling wedge pattern.
  • The stock is trading below the 50-day moving average (green) and recently rebounded to the 200-day moving average (blue), indicating that the stock is likely facing a period of consolidation.
  • The 50 day moving average may hold as resistance, and the 200 day moving average may have just held up as support and may again in the future.

Key levels to watch out for:

  • The falling wedge pattern occurs after a stock has raced higher and retreated with highs falling at a faster rate than lows.
  • The action would need to cross the setup resistance line to see an upward move, and that move would likely be accompanied by above average volume.
  • The $ 1 level has been a key area on the stock. This area was previously resistance before becoming support. The stock fell below this level in mid-April 2021 and has since held the level as resistance.

And after?

Bullish technical traders would like to see the stock break out of the descending wedge pattern and build higher lows to the $ 1 resistance. If the $ 1 resistance can hold and the stock can consolidate above that level, it could see a higher push.

Bearish technical traders would like to see the stock cross the line connecting the lows in the pattern, which could cause a strong push down. If the 200-day moving average were to break, the stock’s sentiment could turn bearish and continue to fall.

(Photo: sundial)

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