The CGX price dipped around 4.60% on Monday as the risk aversion prevails and hits the markets badly. The company has posted more than 14% losses year to date, while the past three months have seen more than 13% losses. This proposes a negative sentiment about the company. Due to the Covid restrictions, the company has seen a fall in its revenues and profits. However, the recovery from Covid and removal of restrictions have given some room to the CGX and other entertainment companies.
The company will announce its earnings report tomorrow, the 10 May 2022. If the company comes up with the upbeat earning results, the share price can pare off losses and rise above $12.00. However, on the other hand, if the earning report is dismal and the stakeholders do not see their expectations being met up, the share price can further plummet to $10.00 and lower.
The daily chart of the CGX shows that the bears have been dominating the market since 21 April 2022. The price has gone far below the key SMAs on the daily chart. In fact, the strong support of $12.00 has been broken too. It is a sign of a deeper downside correction. In that case, the price may test the lows of 06 December 2021, around $10.93. However, the volume for the recent few days has declined. It indicates that the bears may run out of steam.
The stock is good to buy around the support of $10.93 area as the support seems quite strong. On the other hand, the extreme oversold conditions may also limit the downside.