𝐈𝐬 𝐂𝐚𝐧𝐨𝐩𝐲 𝐚𝐛𝐨𝐮𝐭 𝐭𝐨 𝐠𝐨 𝐮𝐩 𝐢𝐧 𝐬𝐦𝐨𝐤𝐞?
The news last week was largely about the 'wallstbets effect' that was taking place in the weed stocks; and while a lot of that is true - it misses some underlying truths about what was happening in the sector last week. It's biggest other news event last week was the CGC earnings report. While the report was mostly similar to their previous earnings reports, it did point to a belief that many long term holders believed in. CGC is closer to profits than many people realise. Now those profits won't be next quarter. They probably won't even be next year. But they are trending in a direction that should confirm their standing as a powerhouse in this sector.
From a technical standing, once the noise washed out, we saw a return to the middle of the rising channel. To keep the candles within the channel we are using an extended +/- 3 bound compared to the usual (and preferred +/- 2). This increase in the bounds suggests that this is more volatile than more mainstream stocks, which makes sense given it is an unprofitable company in a niche market sector.
The pullback at the end of last week also saw a significant drop in the daily RSI. This has set up a hidden bullish divergence against the spot price - which has not fallen as far.
Volume remains up, with on balance volume favouring the bulls right now.
Overall, if you are an aggressive trader; this is a solid position to look for entries - if you are willing to absorb the potential ~15-20% downside. For the more cautious trader, prices around the $36 range (if that happens) are a bargain basement buy - but you may miss the boat and need to wait for the next trip.
The news last week was largely about the 'wallstbets effect' that was taking place in the weed stocks; and while a lot of that is true - it misses some underlying truths about what was happening in the sector last week. It's biggest other news event last week was the CGC earnings report. While the report was mostly similar to their previous earnings reports, it did point to a belief that many long term holders believed in. CGC is closer to profits than many people realise. Now those profits won't be next quarter. They probably won't even be next year. But they are trending in a direction that should confirm their standing as a powerhouse in this sector.
From a technical standing, once the noise washed out, we saw a return to the middle of the rising channel. To keep the candles within the channel we are using an extended +/- 3 bound compared to the usual (and preferred +/- 2). This increase in the bounds suggests that this is more volatile than more mainstream stocks, which makes sense given it is an unprofitable company in a niche market sector.
The pullback at the end of last week also saw a significant drop in the daily RSI. This has set up a hidden bullish divergence against the spot price - which has not fallen as far.
Volume remains up, with on balance volume favouring the bulls right now.
Overall, if you are an aggressive trader; this is a solid position to look for entries - if you are willing to absorb the potential ~15-20% downside. For the more cautious trader, prices around the $36 range (if that happens) are a bargain basement buy - but you may miss the boat and need to wait for the next trip.
