Canopy Growth Corporation (CGC) shares fell nearly 2% in pre-market trading after Chair and CEO Bruce Linton stepped down. Amid falling sales and rising losses, Constellation Brands, Inc. (STZ) and other shareholders became impatient and ousted the executive over the holiday. Shares initially rose 2.3% during yesterday's shortened trading session before giving up some of those gains during the pre-market session.

Analysts have mixed opinions of the move to oust Linton. Stifel analyst W. Andrew Carter said that Linton's vision and founder status would be "sorely missed" but maintained a Buy rating on the stock. Bryan Garnier analyst Nikolaas Faes downgraded Canopy Growth stock to Neutral from Buy and lowered his price target from C$85 to C$60 per share following the shakeup. 

Mark Zekulin agreed to become the sole CEO of the company and will work with the board to search for a new leader. Rade Kovacevic, a member of the Canadian team and recreational strategy, will assume the president role. John Bell was appointed as chair of the board ahead of the next board election in September of this year.

Chart showing the share price performance of Canopy Growth Corporation (CGC)

From a technical standpoint, the stock has been forming a descending triangle that could spell downside ahead. The relative strength index (RSI) remains neutral with a reading of 46.77, while the moving average convergence divergence (MACD) remains sideways. While the last candle was a bullish engulfing, these indicators provide few hints about future price direction over the coming sessions.

Traders should watch for a breakdown from trendline support at around $38.00 toward reaction lows of around $28.00 from earlier this year. If the stock rebounds from these levels, traders should watch for a retest of upper trendline resistance and the 200-day moving average at $42.20. A breakout from these levels could lead to a retest of prior highs of around $46.00 or $52.00 per share.

The author holds no position in the stock(s) mentioned except through passively managed index funds.