Although Cronos Group Inc (NASDAQ:CRON) refers to itself as an iconic global brand, many investors might call it a big disappointment.
Currently trading down over 70% from its Feb. 4, 2019 high of $25, Cronos has failed to garner any excitement over its brands or its partnerships and its fourth-quarter financials were another massive miss.
For the first quarter of 2021, three months following the launch of its "Happy Dance" line of products through Ulta, Cronos posted net revenue of $12.6 million, which represents a year-over-year increase of $4.2 million. Cronos’ adjusted EBITDA for the quarter was a loss of $37.1 million.
Cronos blames its losses on an increase in sales and marketing costs.
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The Cronos Chart: Cronos’ stock has been trading in a bullish descending channel since Feb. 16 making fairly consistent lower highs and lower lows. On April 20, Cronos tested and bounced off a support level at $7.67 and has retested and bounced from that level three times since. On Friday morning Cronos' stock reacted in a bullish manner to earnings and attempted to break up through the descending channel but failed and wicked off it.
Cronos’ stock is trading below both the eight-day and 21-day exponential moving averages (EMAs), both of which are bearish indicators and a lack of volume in the stock, over the past three months, which indicates traders and investors have lost interest.
Bulls want to see sustained bullish volume to break up from the descending channel. If it can break through the channel, it has room to reach $8.55 before meeting another resistance level. If it was able to clear that level, it could move up towards $9.87.
Bears want to see bearish volume enter the stock to drop Cronos below support near $7.60. If Cronos loses the level as support, it could fall further to the $6.95 mark before another chance of a bounce.
CRON Price Action: Shares of Cronos Group were trading up 1% at $7.70 at last check.