Cannabics Pharmaceuticals was scheduled to be included in yesterday’s Cannabis Cornucopia article, but the decision was made to leave it a little because it looked like it might back off some from the resistance level that we can see on its 6-month chart below. This it did by dropping by nearly 8% yesterday, making it more attractive, because this is a strengthening picture and it looks like it won’t be long now before it succeeds in taking out this resistance. Whilst it could back off a little more first, various factors point to the price breaking out above the resistance soon. These are the increasingly bullish price pattern, with a couple of big white candles showing up in recent weeks, the increasingly bullish volume pattern, with much more volume on up days, for example a few days back when it ran at the resistance on big volume and the resulting strength in volume indicators, which are now trending higher, and finally there is a large gap between the 50 and the flat 200-day moving average, allowing for a sizable recovery rally.
The longer-term 14-month chart shows most of the history of the stock. On this chart we see that there was a very big rise in percentage terms in the Fall of last year, on the back of the euphoria in the sector at that time (2nd wave of euphoria pending) which is dwarfed on this arithmetic chart by another big percentage gain in February of this year, and after this party a long and tedious hangover set in. This is clearly a stock that can make very big gains in a short space of time and with little warning. Initially it is thought likely that it will break above the nearby resistance in the $1.02 - $1.10 zone and then run quickly at the resistance in the $1.50 - $1.60, where, depending on how it looks at the time, we may consider taking profits. Note that it may only pause here before blasting higher – if it gets above this level we could see a dramatic spike, which will be caused to a greater extent not by investors who have done their due diligence, but by momentum traders piling into anything with cannabis in its name.
So, Cannabics Pharmaceuticals looks like an attractive speculative play here, with an awareness that there is some chance that it could react back further short-term. There are 188.3 million shares in issue.
Cannabics Pharmaceuticals
website
Cannabics Pharmaceuticals Inc CNBX on OTC, closed at $0.92 on 21st November 17. ,
Posted at 9.30 am EST on 22nd November 17.