Cannabis stocks reacted back much harder than we expected earlier in the year, on the basis of their strong long-term charts – if we’d known how hard they would react, we would of course have taken profits. But that’s “water under the bridge” – what matters now is that they are in position for another strong upleg, and there are plenty of signs that it is about to start, with one of our stocks General Cannabis, already taking off vertically higher. The following stocks are all immediate strong buys, with stops as indicated beneath nearby support. We already went for one of them before the close yesterday, American Cannabis, which is listed again below for the sake of completeness.
American Cannabis AMMJ, $0.15
American Cannabis, which we bought at a good Price, reacted back much further than we expected in the last update. Now it is looking like a very attractive speculative play here because it has reacted back into a zone of strong support, its Accum-Distrib line is forging ahead and making new highs, despite the price drop, which augurs well for a sizeable rebound, at the least, and a similar stock with a similar setup has just taken off vertically higher, that stock being General Cannabis, code CANN.
We bought this last night before the close at $0.14, when it was the subject of a separate brief report.
Cannabis Sativa CBDS, $1.71
A large bull Pennant is believed to be completing in Cannabis Sativa, a view which is given strength by the generally bullish look of stocks across the sector after their recent heavy reaction. The advance in this stock in mid-March was dramatic and powerful which further suggests that another upleg is likely, and given that volume has now dwindled to a very low level, it is highly likely that the expected upleg will start soon. The support shown on the 6-month chart below MUST HOLD, therefore existing holders or new buyers should place a stop beneath it, at, say, $1.38
Cannabix Technologies BLOZF, $0.20
From its mid-April peak we have seen a relatively modest reaction in this, back to the zone of strong support shown on its 6-month chart below. Volume has died back in a most satisfactory manner as this reaction has unfolded, with volume indicators remaining buoyant, especially the Accum-Distrib line, which has remained near to its highs – this is a very positive sign. With moving averages in decidedly bullish alignment, the stock oversold, volume now very light, and a bull hammer showing up on the chart yesterday, the stage is set for a new upleg to begin, as in RIGHT NOW.
General Cannabis Corp CANN, $1.09
General Cannabis has already taken off strongly higher, rising by over 40% in a few days. If holding stay long, but otherwise we won’t chase it – better to go for the others listed here. The chart for this will be added later.
Organigram Holdings OGI.V, C$1.05
Organigram Holdings has also reacted back in a relatively modest manner from its April peak to a clear line of strong support, where some long-tailed candlesticks have appeared suggesting that it will turn up from here. Moving averages are in strongly bullish alignment and support a new upleg from here, with the price just beneath a quite steeply rising 50-day moving average. The weak On-balance Volume line is belied by the strong Accum-Distrib line, which shows internal strength. Strong buy here with a stop at C$0.98, just in case.
End of update.
Posted at 9.25 am EDT on 10th June 16.