CGC bulls take a standI'll readily admit today took me completely by surprise. I studied numerous charts last night and came to one conclusion - the sector would not have a bounce today because CGC's 4hr RSI was not low enough; it was only 32, when generally bounces happen from 27 or lower. CGC opened the day with multiple rejections from the high of premarket, then saw a bear break to a V-shape recovery. This wasn't the bounce setup I wanted, it wasn't the price action I expected, so I sat out.
I missed the entire 8% move and I'll sit that out every single time when I'm not comfortable with the setup.
Three things today are worth noting
CGC bulls didn't roll over after the most significant bear break since June;
We bounced 10% from the low of yesterday to high of today, from RSI levels on the 4hr chart that are not historic bounce levels; and
We finished at the high of the day with a big bullish candle
The volume is a little lower than I would have liked to see, but we are expecting to set a lower high on the daily; Anything under 51.21 will be that lower high. Our new must hold level is 44.90 and that is the range I'll be watching.
The bulls were in full control all day and set no hourly supports; the chart is very extended. We've bounced enough that we would anticipate a higher low above 44.90, and the bulls will then have to break hourly resistance to see continuation of the oversold bounce.
I've been of the opinion we won't get a bull run into Oct 17th because we've been running already for 6 weeks. I've been watching the sector for two weeks waiting for bulls to show up and buy, warning we'd see profit taking and a bear break, which we saw yesterday, but I'm starting to look at the sector a little bit more bullish after today because I'm picking up on clues of some underlying bull strength. I'm not saying we will run into Oct 17th, but I was ready to rule it out last night and today I'm not so sure anymore.
It's all about 44.90 - 51.21 right now, and I expect we will top out soon before needing a healthy pullback on the hourly chart in order to see continuation.
By the way, I do analysis on the entire sector across all the mj charts I publish. If you're not looking at all the names I talk about, you're not getting the full sector-wide analysis. Follow me to get updates when I publish ideas and pay attention to the mj names you typically don't look at too, so you can stay in the know and get the full picture.
Potstocks
WEED bears assert dominance, finally breaking the daily uptrendWEED broke the daily equilibrium bearish today and closed down 6.5%. A small bounce at the end of the day cooled off RSI levels and we're no longer oversold on any timeframe. I was looking forward to an oversold bounce tomorrow but after hours trading further cooled off RSI and finished trading in a bear flag setup.
Two daily supports were broken today, after low of today our next support is 52.80 - that's a good 10% further to the downside. I'm personally going to be patient waiting for a setup I like. If we get a big gap down tomorrow, for example, opening below $55.00, that's a setup that will have me interested. Otherwise, RSI levels have cooled down enough at the end of day bounce that we could easily see another -6% day tomorrow.
I've been talking a lot in my past ideas about the psychology of what's going on right now in the sector. To further drive home how sentiment has shifted from bulls to bears, note that it's been a full three weeks since we've had two green days in a row - and this is when everybody has been expecting a huge bull run into October 17th. I'm not going to be entering positions based on what I want to happen, I'm going to watch the charts for a setup that favours a bull entry.
APH dumps and holds next support - barelyAPH gapped down today, filled the gap, then turned around and never looked back. I held a short most of the day today and covered it a little early just under $16.30. Support at 15.76 held by two pennies. APH saw such a significantly bearish day because after losing 18.57 last week, the next support was 15.76 - a full 18% below.
We're at the point where we can start looking for an hourly oversold bounce, but APH is unlikely to bounce here without sector leader CGC bouncing as well. CGC cooled off RSI on all timeframes at the end of the day and in after hours and is sitting currently in an hourly bear-flag setup, and can easily see another solid red day tomorrow. If that's the case, I don't expect the APH bulls to be able to bounce significantly even though it's RSI is much more beaten up.
Increasing bear volume on the daily has the bulls salivating at the opportunity to play the bounce, but smart traders are sitting on their hands very patiently waiting for the setup to come to them rather than trying to catch a falling knife.
On a bounce, anything under 18.69 will be a lower high on the daily chart.
ACB far from support break but showing tell-tale signsACB held up very well today in the face of across the board sector weakness. 11.21 support is key to save the daily uptrend; I do expect that level to hold and I would then look for a tightening daily range and a lower high relative to 12.95.
Volume offers no real red flags but RSI has broken support and shows the first signs of bearish divergence.
ACB offers a potential bottomfish opportunity tomorrow, but be sure to stop out if 11.21 support breaks as that would confirm a daily downtrend and I'd be looking down towards the mid $10 range for a new temporary base.
CGC bears assert dominance, finally breaking the daily uptrendCGC broke the daily equilibrium bearish today and closed down 6.5%. a small bounce at the end of the day cooled off RSI levels and we're no longer oversold on any timeframe. I was looking forward to an oversold bounce tomorrow but after hours trading further cooled off RSI and finished trading in a bear flag setup.
Two daily supports were broken today, after low of today our next support is 40.68 - that's a good 10% further to the downside. I'm personally going to be patient waiting for a setup I like. If we get a big gap down tomorrow, for example, opening below $42.00, that's a setup that will have me interested. Otherwise, RSI levels have cooled enough that we could easily see another -6% day tomorrow.
I've been talking a lot in my past ideas about the psychology of what's going on right now in the sector. To further drive home how sentiment has shifted from bulls to bears, note that it's been a full three weeks since we've had two green days in a row - and this is when everybody has been expecting a huge bull run into October 17th. I'm not going to be entering positions based on what I want to happen, I'm going to watch the charts for a setup that favours a bull entry.
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APH bears in full controlAPH bulls had a gift this morning with a gap-up open breaking the hourly downtrend, and re-confirmed the hourly downtrend by giving back the entire move back, barely holding the low of Friday by 5c. The bulls couldn't even muster a small push up after opening bell, leaving the bears in full control and the opening price as the high of the day.
The range I'm watching is 17.37 - 20.57. If the low can hold I am anticipating a lower high on the daily roughtly in the $19.50 area at best, unless some news catalyst propells us higher.
Other than 17.37 there is absolutely no support on the chart until 15.76; the loss of that level, would break the weekly uptrend and be a red flag for investors with a much longer term mindset. I don't anticipate a straight drop to there and to break it, the most likely scenario would be to find a new support, bounce and set a daily lower high, then come down to test that support region.
Keep an eye on CGC, 1% away from a bear break on the daily chart. I've seen APH drop several dollars in a span of minutes before and it's already the weakest of the major sector names. The correlation to the sector leader, CGC, breaking bear will definitely favour the APH bears.
CRON gap-up & profit taking ruin a great chart setupCRON was the one setup I was most looking forward to this morning with it's multiple daily inside bars and triple bottom in the $10.80s range. That setup was ruined with a higher open, and profit taking all day. While the daily candle is very bearish, CRON did hold key support and broke the hourly lower high pattern. To fully shift momentum back to their favour, the bulls must hold low of day 11.05 and break high of day 11.99 (call it 12.00 even). That would confirm an hourly uptrend, but I would still anticipate a daily lower high somewhere around $12.75 at best. The hourly MACD bull move is very week and keeping me skeptical of any ability for significant followthrough, and the daily MACD extended even further down today despite the higher trading range compared Friday.
Keep an eye on CGC here - the sector leader if very close to a significant daily bear break and the correlation to the sector leader will favour the CRON bears.
Key range to watch is 10.82 - 14.00.
Sector weakness holding back ACB bullsI'm still impressed by the ACB bulls with their bounce hitting the very top end of my target zone, rejecting from the .786 fib pull just below $13.00 resistance. Having lost the hourly higher low pattern this afternoon I'm confident that our new daily lower high has been set. I'm looking for an equilibrium to form, and anticipating a higher low relative to 11.21 and a daily tightening range as volume drops off. On the break of that range I'll be watching for a volume spike to confirm the momentum.
I love equilibrium patterns because they are one of the best patterns to play in my opinion, but one must keep in mind we're watching this range tighten as CGC / WEED is most likely going to have a daily bear break, putting downward pressure on the sector, including on ACB. Coca-Cola rumours are helping the bulls stay strong, but without an actual deal a rumour can only do so much in the face of a sector that's pulling back pretty significantly.
The range for me right now is 11.21 - 12.95. As long as CGC does not break below $48 (or WEED break below $62) I would definitely be interesting in bottomfishing a daily higher low on ACB above 11.21. If CGC breaks bear, I fully expect ACB to follow suit and lose our key 11.21 daily support level.
CGC bulls prove nothing (Do I sound like a broken record yet?)CGC opened significantly higher considering the big bearish momentum Friday afternoon into the weekend. Bulls made two attempts first thing this morning to break the high of Friday and fell short both times, resulting in profit taking and another close down at the low of the day. We have an inside bar on the daily to watch for clues. It's worth noting CGC has rejected from the daily Middle Bollinger Band two days in a row after losing it on Thursday. Zooming into the hourly, every test of the hourly Middle Bollinger Band has been a rejection as well since losing it on Sept 26th.
The range I'm watching remains the same as it's been for the past week; 48.02 - 55.00, and we're much more closer to a bear break than to a bull break. The MACD is signaling bearish momentum, backing up the selling pressure we're seeing on the charts. Volume has been well below average for the past two weeks in a row and I expect that pattern to continue until we get a break of that range.
Much like the price action, daily RSI is tight against the support level as well.
I feel like a broken record to keep using the same phrase, but the bulls really have their backs against the wall here and to make a move, or lose the daily uptrend and significantly shift momentum just two weeks out from legalization. I am absolutely looking to enter a swing short entry on the loss of $48.00 psychological support, looking for significant follow-through to the downside
Many people are looking for a bull run into Oct 17th and I keep pointing out one thing. We've been running since Aug 14th, during which the price has increased more than 120%. That's significant and this run will not continue forever. The psychology of the chart is bulls fighting as hard as they can waiting for the buyers that everybody thinks are about to show up. If those buyers don't show up, investors are going to take profit, and that will result in a bear break and a significant shirt in momentum for the entire sector.
Trying to find re-entryYou can see that the pressure in the RSI broke upward when we went to .85 and then bounced off our average line, showing that the average line now represents a support
TRST bulls extended against key resistance TRST is one of the few names that held its uptrend intact rather than breaking key daily support. low of Friday 11.26 is the new must hold level for the bulls to maintain the uptrend. Bulls finished strong at the high of the day, and just below what is essentially a quadruple top on the daily at 12.75. The hourly chart is over extended, having seen 7 green hours in a row and is due for a healthy pullback; Anything over $12.25 would keep the bulls in absolute control and in prime shape for continuation, while anything lower would increase the possibility of setting a lower high compared to the high of Friday.
Daily volume was not incredibly convincing so bulls should kepe an eye on the hourly volume in the pullback on Monday for clues on the possibility of continuation. Of course sector leader CGC will be important as well, if the sector is weak, the correlation may prevent the TRST bulls from being able to continue upwards and test the all time high.
HEXO offers the sector's strongest chartHEXO had a huge breakout on big bull volume late Friday, and only has three resistances from here - High of Friday 8.85, 8.95, and all time high 9.09. The day ended with the bulls trying to form an hourly bull flag.
I'm personally looking for a backtest of either the daily breakout level 8.64, or the hourly level 8.55, which will be must hold levels if the bulls hope to consolidate in a healthy manner and continue upwards to test all time highs.
Right now, this is the strongest chart in the sector, but the bulls will need CGC to cooperate in order to see any continuation from a very significant daily bull break. All time high is less than 4% away!
CRON tight range likely to break on MondayCRON formed its second daily inside bar on Friday as the range tightens up and the volume drops off. I'm looking for a break of range and a volume spike on Monday. I like inside bars because they signal equilibrium (pennant) patterns on a lower timeframe. Sure enough if you zoom into the hourly chart you can see a beautiful equilibrium playing out within our daily multiple inside bars.
Having pulled back 30% from all time high over the past seven trading days I'm anticipating a bull break as more likely that not, but correlation to sector leader Canopy Growth and the overall market will be worth keeping an eye on.
The range I'm watching is the low of Friday and the high of Friday, 10.86 - 11.40. Key daily support is 10.82, so any attempts to make an early entry by bottomfishing this range should have a stop loss just below that level.
On a bull break I would expect CRON to top out around $12.50-13.00 and then look for a tightening range on the daily chart. On a bear break we're looking down another 14% before our next support at 9.26.
For anybody playing CRON on the Canadian ticker, the setup is a little different. The range to break is 14.11 - 14.77. Key daily support is 14.05 so your stop should be just under that. On a bull break I would expect to top out around 16.00 and on a bear break we're looking down to test $12.05 support.
APH in price discovery, looking for a new support levelAfter breaking its daily uptrend, APH bulls showed up Friday looking to set a daily lower high compared to 20.57. I'm expecting a back-test of the daily MA20, currently at 19.51 in the current configuration. I don't like any bull entries in APH right now based on the daily chart, but if you zoom into the hourly we see the bulls trend trying to change the trend, looking for a higher low and then a break of 18.54. If playing that hourly chart you will likely not want to hold this position for more than a night or two, but in my opinion there are better setups out there. It's worth noting the low daily bull volume.
As one of the weaker charts, correlation to the sector leader will favour the APH bears and I expect further downside should Canopy break bearish from its daily equilibrium. They daily range right now is 17.37 - 20.57, but if SCYB continues to sell off APH shares we will look for further downside after this move tops out.
If you have a long term position in APH and don't like trading it as much, consider this. Stopping out on the break of our key 18.57 support saw a 6.5% move to the downside, meaning you could have bought back 6.5% more shares with the same capital. That's one way you can compound profits, even if you don't want to watch the charts throughout each and every day.
ACB is strong in the face of sector weaknessACB broke key daily support but bulls bought the dip and finished strong near the high of the day, completely ignoring the end of day dump by the sector leader on bearish news. Price bounced just below the .382 fib level from low of consolidation to our recent high.
The daily volume was far less than I would have liked on this move, and so I expect a daily lower high to best set Monday most likely. Hourly resistance is 12.60 then 12.98 (call it 13 psychological), and I'm looking for the daily chart to top out somewhere within that range. That said, breaking $13.00 would have me very impressed but we will need much more volume to get there.
The new daily range I'm watching is 11.21 - 13.48 (again, let's call it $13.50 psychological). ACB is holding up much better than many names in the sector on the back of Coca-Cola investment rumours and an uplisting to a major US exchange this month.
In two weeks ACB saw a 70% move from 7.65 - 13.53 and the weekly chart is very extended, and is more likely than not to require a pullback before any continuation to the upside is possible. That said, a news catalyst can definitely change that and push the chart to new highs.
WEED bulls proving nothing to meWEED started the day Friday with a gap down open just above our key daily level, providing a great bottom-fishing opportunity to play in our daily equilibrium. The entire move was given back in the afternoon when news came out of Canopy withdrawing their 'Chronic By Dre' trademark request after forgetting to get permission from the rapper to use his name. The result is a very bearish candlestick on the daily chart, still within our daily equilibrium, and still very close to a bear break. Turning on after hours on the American ticker, you can see the price rejecting from EMAs and providing a bear flag setup if the low of the afternoon sell-off 48.55 breaks.
The past two weeks on the daily chart have been a chopfest and I've been sitting on my hands waiting for it to play out, so we can finally have some clarity for the short term. I'm not giving the bulls any benefit of the doubt here, they need to prove it to me. First step would be to hold our key level 62.02 and break Friday's high 66.19.
Key range for me is 52.81 - 72.00. Until one of these levels break, I don't expect much trading opportunity as the range is so narrow it's difficult to find a pattern to play off of. If we break bullish, I will be a buyer looking for a new all time high heading into Oct 17th, and if we break bearish, I'll be entering as a short looking for a 5-7% move to the downside.
If we break bearish I would zoom out to the weekly chart and anticipate forming a weekly equilibrium, with a new higher low above 52.81. After covering my short I would be looking to enter long, as a range of 52.81 - 72.00 is more than enough room to play within and not have to worry about choppy price action giving false signals.
Reading the psychology of the chart, the past four days have clearly seen traders taking profit as they run out of patience waiting for new buyers. Many people are anticipating a run into Oct 17th, but I'm becoming skeptical there are many people looking to buy in the next two weeks that haven't already bought in.
I'm remaining neutral on what I think will happen, but we are 1% away from a bear break on the daily and 14% away from a bull break. The weekly chart remains very healthy.
CGC bulls proving nothing to meCGC started the day Friday with a gap down open just above our key daily level, providing a great bottom-fishing opportunity to play in our daily equilibrium. The entire move was given back in the afternoon when news came out of Canopy withdrawing their 'Chronic By Dre' trademark request after forgetting to get permission from the rapper to use his name. The result is a very bearish candlestick on the daily chart, still within our daily equilibrium, and still very close to a bear break. Hourly RSI has cooled and could very easily see a significant move down. Turning on after hours (American ticker only) you can see the price rejecting from EMAs and providing a bear flag setup if the low of the afternoon sell-off 48.55 breaks.
The past two weeks on the daily chart have been a chopfest and I've been sitting on my hands waiting for it to play out, so we can finally have some clarity for the short term. I'm not giving the bulls any benefit of the doubt here, they need to prove it to me. First step would be to hold our key level 48.02 and break Friday's high 51.21.
Key range for me is 48.02 - 55.69. Until one of these levels break, I don't expect much trading opportunity as the range is so narrow it's difficult to find a pattern to play off of. If we break bullish, I will be a buyer looking for a new all time high heading into Oct 17th, and if we break bearish, I'll be entering as a short looking for a 5-7% move to the downside.
If we break bearish I would zoom out to the weekly chart and anticipate forming a weekly equilibrium, with a new higher low above 40.68. After covering my short I would be looking to enter long, as a range of 40.68 - 55.69 is more than enough room to play within and not have to worry about choppy price action giving false signals.
Reading the psychology of the chart, the past four days have clearly seen traders taking profit as they run out of patience waiting for new buyers. Many people are anticipating a run into Oct 17th, but I'm becoming skeptical there are many people looking to buy in the next two weeks that haven't already bought in.
I'm remaining neutral on what I think will happen, but we are 1% away from a bear break on the daily and 14% away from a bull break. The weekly chart remains very healthy.
Long on Namaste - Parallel Channel I just bought in N.Tsx. Namaste Technologies is within a parallel channel. Right now, the stock is touching the lower limit. RSI shows an oversold tendency. I believe that the stock could bounce, as the sentiment towards Cannabis remains fairly positive. This is a short-term long that'll be closed before Friday.
Trade safe guys!
LONG on CRON - Parallel Channel and Falling WedgeI just took my gains on the short idea that I published on CRON -2.79% a couple days ago. Right now I believe the stock can bounce on the channel and price shows a falling wedge pattern. MACD is crossing as well and shows sign of a bullish opportunity.
I believe that the general sentiment on pot stocks is still fairly positive. However, there is a lot of speculation around it and I believe most pot stocks are way overvalued
CGC Continuing Bullish PatternDespite being extremely overvalued, chart technicals are mostly good. MACD and RSI have cooled down over the past week and it's poised for further growth. I expect CGC will see another day of gains tomorrow, and end the week green. As Tilray consolidates, and CRON continues to oscillate wildly, this will enjoy steady, but slower, upwards acceleration throughout the end of September. There will likely be down days, of course, but I believe we will continue to see a rise in at least CRON and CGC in the first couple weeks of October in anticipation of Canadian legalization on October 17.
I'm currently strangling CGC and CRON with put strikes directly below the current price and moderately out of the money calls.
The hidden Stock Namaste TechnologiesAnother Cannabis for the taking, this is touted to be the amazon of Cannabis.
Well you can't literally compare it's growth with amazon because it only sell Cannabis related product where else amazon does almost everything else.
We have not looked into any of this company financials, but considering it's popularity and it price play this looks like one that can go for break out. Got them yesterday and got a decent 10%.
We still feel something is brewing and hopefully with the hype on Pot Stocks and the sell off from Tilray, buyers will shift its money to the others.
#tradersarticle
