Aphria Inc
(NYSE:APHA) produces and sells medical cannabis in Canada
and international markets.
APHA stock broke support around the $6 level. This level was
also support during the middle and then again at the end of
August. If it continues to head lower there may be some
support around the $5.20 level because it was where the low
was in early August.
The $6 level will probably now become a resistance level.
This is because the investors who bought it when it was a
support level are looking at losses now that the stock is
lower. They tell themselves that if it rallies back to the
level, they will sell their stock so that they can get out
at breakeven.
Those who sold it short at the support level are making
money now that it is lower. They tell themselves that if it
rallies back, they will short more and add to their
positions. Both of these groups of investors will place
their sell orders at the $6 level and this supply of stock
creates resistance.
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