Holders of Sundial Growers Inc. (NASDAQ: SNDL) need to watch the critical 70-cent level. This level has been support for the stock, but now it may be breaking. If it does, it may be the beginning of a new downtrend.
What To Know: Support is a large concentration of buyers who are trying to pay the same price for shares. In this case, it’s 70 cents.
At support levels, there is more demand for shares than there is supply. This is why sell-offs end when they reach them.
Sometimes stocks rally off of support levels. That’s what happened when shares reached 70 cents in May and August.
What's Next: But when the support breaks, meaning the stock trades below the level, it’s a sign that the buyers who created the support have left the market. With this large amount of demand for the shares out of the way, the stage is set for Sundial to move lower.
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