A Big Move Up Could Be Coming Soon for this Cannabis Leader…

I’m enjoying some time with my dad in the beautiful Blue Ridge Mountains of Virginia this weekend.

On my way down, I stopped by the headquarters of the National Institute for Cannabis, and got to catch up with their incredible team. If you want to learn more about the cannabis industry, or if you’re seeking a way to break into this potentially lucrative market, then the cutting-edge research that the NICI team provides its subscribers is exactly what you’re looking for. Find out how you could reap the rewards of what could be the next $1 trillion industry.

That visit got me thinking about a broader view of what’s going on with the cannabis stocks. Two weeks ago, I sent you an earnings update about three of the four biggest market cap pot stocks (you can find that update by clicking here). And as of yet the biggest of them all, Canopy Growth (CGC) has not yet reported their earnings for the quarter. Zachs lists a tentative date of June 26th, but that date is not yet firm.

Let’s take a quick look at how some of the better known names are looking on the technical front.

Here’s a relative performance chart of some of the more popular names:

Some takeaways from this chart:

  • 6 out of 8 of these top pot stocks are up with double digit gains for 2019.
  • Volatility continues, with wide price swings seen in almost all of the stocks.
  • This relatively new investing sector is outperforming almost all others.
  • Wide divergence of stock performance shows the importance of stock selection in these emerging companies.

The three biggest market cap pot stocks are at key technical junctures on their charts – all testing their 200 day moving averages (interestingly, just like the broader indexes).

Cronos Group (CRON) has been a strong performer this year and has respected the 200 day moving average quite well, with a strong bounce off that well-watched line in the past week.

Aurora Cannabis (ACB) is also in a week-long test of the 200 day MA:

The biggest of the pot stock pure plays, CGC, has moved on both sides of the 200 day MA over the past year, and is currently looking to break through the 200 day and resume its bullish run.

With a volatile sector like cannabis stocks, our tried and true formula of buying on pullbacks is a prudent way to dip your toe into this group of stocks that have such explosive growth potential.

Great trading and God bless you,

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D.R. Barton, Jr.

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