The Highs And Lows: Pot Stocks In 2019
Deron Wagner | Jan 15, 2019 11:19PM ET
Pot stocks are making a comeback after a few months of distribution. Marijuana ETF ETFMG Alternative Harvest ETF (NYSE:MJ) is up +30% after undercutting a prior swing low last December. The weekly chart is back above the 10-week moving average (10wma) and is attempting to clear the 40-week moving average (40wma). The big run up off the lows is a great start, but the price action is a bit too volatile to produce a low-risk entry point for an intermediate-term trade. In order to produce a legit buy point, $MJ would first have to form some sort of base of four or more weeks that doesn’t give back much more than 40% of the last rally off the lows. During the base, volume should dry up while the 10-week MA begins to turn up.
Nice reversal, but nothing to do right now.
Let’s take a look at a few of the more active marijuana stocks, starting with Canopy Growth Corp (NYSE:CGC), which is nowhere near a buy point after a +50% move off lows the past two weeks. In general, any tight price action near a 10-week moving average within an uptrend has the potential to produce a very low-risk buy point.
$CGC is strong, but nothing to do right now.
Aurora Cannabis Inc (TO:ACB) is also not in play right now, but the weekly chart is worth monitoring for a tight consolidation to form in the $7 to $12 area. A move out from a valid basing pattern could lead to a breakout from a year long trading range down the road.
Cronos Group Inc (NASDAQ:CRON) is the only liquid stock within the group that is potentially near a valid entry point for an intermediate-term trade. $CRON isn’t near the 10-week MA, but it has formed a cup with handle like pattern circled on the chart below.
Get The News You Want
The weekly chart has tightened up quite a bit, with the lows of the last correction only 30% off highs (B) vs 60% at point A.
A breakout from this pattern could lead to an explosive rally at new highs with no resistance in its way.
$CRON should be monitored closely for a breakout entry within the next few weeks.
Original post
/h2
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.