UPDATING getting high in the weed stock patch 9/6

UPDATE 9/6: as suggested in this post yesterday the marijuana stocks were looking vulnerable to a correction. Today they took the projected tumble: TLRY down 15.4%, CGC down 4.5%, CRON down 7.55, the sector ETF, MJ, down 2.1%, and INSY down 7.6%. See updated chart below. There are still substantial profits on the table. Might think about lightening up, if not exiting completely (it’s been a great fast run). There is likely more downside to come since the market, even if it bounces tomorrow, is now in a down thrust and these stocks which have gone straight up and can also go straight down).

This is an update to this post two weeks ago:

A Serious Swing Through The Weed Patch

Marijuana stocks have gone crazy in the last 10 trading days, putting on the kind of gains that last marked the dot-com bubble in 1999 and 2000, which of course lead to the end of the nineties bull market.

TLRY up 189%, CGC up 52%, CRON up 87%, the sector ETF, MJ, up nearly 28%.

See the chart panel below. Gains per $100k traded are in the white flags on the lower right of each chart.

If I owned these, I would exit on any down bar to preserve profits. Note IIPR and INSY while still profitable have followed through currently on down candles. CGC turned in a red candle today which makes it worth watching on the open tomorrow. In fact, CRON and MJ also look vulnerable.

Congratulations to anyone hold these, but, me thinks, one should not fall in love with them.

(click on the updated chart for a larger view)

#SwingTrading – a serious swing through the weed patch

Marijuana stocks are the ruling weeds in the market garden on this upswing.


SWING TRADING TRIGGER – AUGUST 16TH

That was the technical trigger for the open three days ago.

The fundamental trigger came on the news Constellation Brands (STZ), U.S. distributor of Corona and Modelo beers, was investing $4 billion for 38% of CGC. All of a sudden, the Wall Street mob discovered it might be acceptable to pour money on the weed patch, particularly those springing up in Canadian gardens where marijuana has recently been made legal throughout the country.

As a result, of those traded in the U.S., CGC is up 26; a new IPO, TLRY, up33%; CRON, 27%. Even the most legitimate of the medical marijuana companies, the stalwart GWPH is up 3.6%. See the white flags on the lower right of each chart below which correspond to the cash and percent gained for each $100K invested.

Of particular note is MJ, up 10.7 percent, the sector ETF for the weed patch. MJ tracks the Prime Alternative Harvest Index, generally by holding many of these stocks and others traded on the Toronto Exchange.

(click on the chart panel for a larger view)

$GWPH – still the best marijuana stock

After four more states ended marijuana prohibition in Tuesday’s election with California (the biggie), Massachusetts, Maine and Nevada legalizing its use, there is increased interest in the stocks in the sector.

Many are small and speculative almost beyond belief. No doubt several will someday be big winners but the for now leader in the sector is GWPH.

Here is a description of the company (borrowing from Yahoo finance, https://finance.yahoo.com/quote/GWPH/profile?p=GWPH):

GW Pharmaceuticals plc, a biopharmaceutical company, together with its subsidiaries, engages in discovering, developing, and commercializing cannabinoid prescription medicines. It operates through three segments: Commercial, Sativex Research and Development, and Pipeline Research and Development. The company primarily offers Sativex, an oromucosal spray for the treatment of spasticity due to multiple sclerosis. It also focuses on the Phase III clinical development program of Sativex for use in the treatment of cancer pain; and Phase 2 trials in other indications, such as neuropathic pain. In addition, the company’s product pipeline includes Epidiolex, a treatment for Dravet syndrome and Lennox-Gastaut syndrome, as well as other product candidates in Phase 1 and 2 clinical development for the treatment of glioma, adult epilepsy, type-2 diabetes, and schizophrenia. It operates in the United Kingdom, Europe, the United States, Canada, and Asia. GW Pharmaceuticals plc was founded in 1998 and is based in Cambridge, the United Kingdom.

And technically speaking, the stock is strong.  Swing traders may want to just follow the blue 5-day exponential average to move in and out to reduce risk.

(right click on the chart for a larger view)

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