Cannabis stocks are in the news as the Alternative Harvest ETF (MJ) accelerates out of Phase I it’s “accumulation” period. Institutions appear ready to start the upgrade cycle as the ETF is clearly getting bought at 52-week lows.
Summary
Alternative Harvest – Cannabis ETF
Those investors who wish to be guarded in their approach to adding this industry group to their portfolio, can skip the stock picking and buy the ETF for the long haul. Phase II is starting. This is the markup phase as discussed in my book.
Phase I is pretty obvious. Institutions have been actively accumulating shares for their portfolios ahead of the crowd over the past 8 weeks. Volume is above average and up days have seen huge spikes in buying.
RSI and MACD are bullish, suggesting higher prices in the short-term.
Canopy Growth – Cannabis Favorite
Canopy Growth (CGC) was discussed yesterday here, as we see potential upside unfolding in the days ahead. The first target is the 200ema.
RSI and MACD are bullish. Volume increased markedly over the past two trading days. In addition, an obvious invested head and shoulders pattern reflects a neckline at the 21.60 (+/-) zone.
We plan to sell stock into resistance (200ema next level) and buy back shares on dips using this simple strategy.
Finally, remember this, analyst upgrades will most certainly start very soon. This industry group is so unliked that any good news should see higher prices. The lower-priced penny stocks in this group are to be avoided, as weaker hands tend to trade them.
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Happy Trading,
Vinny
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