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I developed analytical techniques that are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. I primarily apply my technique to analyzing S&Ps, generating several round-turn candidates daily. The methodologies are also applied to... More
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Rod David
  • Watershed Week For Marijuana Stocks 0 comments
    Mar 5, 2014 2:09 PM | about stocks: CANN, GWPH, VAPE, MDBX

    I cannot stress enough what a watershed week this is for the Marijuana sector. Notice today's bigger performers, and the laggards. Can you see any common characteristics?

    Many of the bigger performers are double-digit stocks. Meanwhile, the supposed leverage of being a so-called penny stock doesn't seem to be so beneficial. That's quite a switch from earlier updrafts in the industry.

    This week marks the obvious entry of institutional investors into the fray. Watershed, indeed.

    Fiduciary standards generally prohibit the market's largest participants from buying stocks that are illiquid, unproven, or controversial. Until this year, only one or two in the industry were trading in double-digits.

    Think in terms of the Groucho Marx retort, upon rejecting the invitation to join an exclusive club: "I wouldn't want to belong to any club that would have me as a member." The shear size of any one institution prevents it from considering even a single purchase, not when its exposure can represent a big portion of the sector's liquidity. Now the sector's market cap has grown so large that it doesn't need any single institution's participation to support it.

    Marijuana stocks made dramatic upward moves in January as Colorado's merchants began operating. That attracted a great deal of retail buying. Penny stocks were big performers. This week's performance among higher priced stocks tells us there's a new buyer in town. And a new degree of respectability.

    Disclosure: I am long CANN, PHOT, EDXC, MCIG.

    Themes: Marijuana Stocks: CANN, GWPH, VAPE, MDBX
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