Stock of the Day (2/10/21) – Aphria (APHA)

Today’s stock of the day is Aphria (APHA). Aphria is listed on the TSX (Toronto Stock Exchange) as a Canada-based cannabis company. The company owns several greenhouse grow facilities across Canada, and has operations in Germany, Italy, Malta, Colombia, and Argentina.

Chart Formation

Aphria formed a short saucer pattern between January 19-28. The high point on this stock of the day hit $17.50 at the beginning of the saucer on January 19th. This marks $17.60 as the buy point of the pattern (10 cents above the high).

On February 2nd, the stock broke out passed the buy point and closed at $18.86 on heavy volume. Five of the last six trading days from February 2nd to February 9th have shown an increase in price on much higher volume than normal, signaling that bullish accumulation is happening. The one day that declined in price was on lower volume than the other days, another good sign.

Strengths

  • Heavy accumulation occurred since the breakout. This shows interest from institutional investors, a very bullish sign
  • The latest increase is coming from a saucer pattern with a heavy volume breakout day
  • After the breakout, each day the stock gained price occurred on greater than average volume, with only one day decrease in price on low volume

Weaknesses

  • The saucer pattern only developed over 8 trading days. This is a relatively short period of time for a saucer pattern, where the best patterns take at least 6-8 weeks to form

Conclusions

Aphria is an up and coming company, a great growth investing pick for stock of the day today. We would expect more upside to their share price in the coming weeks. If you purchased close to the buy point, don’t forget to take profits on the way up to lock in some gains!

As always, Stock Tavern is not suggesting you buy or sell this stock, and this analysis should not be taken as financial advice. Always do your research and make your own decisions, we all have different risk profiles and therefore no trade is right for everyone.

Disclosure: I have no current position in APHA

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