Pot Stock Medbox (MDBX) Up 47% on Marijuana Squeeze/ New Trades (GALE, GE)!!!
Mama's got a squeeze box
She wears on her chest
And when Daddy comes home
He never gets no rest
'Cause she's playing all night
And the music's all right
Mama's got a squeeze box
Daddy never sleeps at night
We normally spin office classics on Friday's but every now and then we fire up the iTunes to search for a theme song to describe the market or a stock. It also helps to calm the nerves and itchy trigger fingers when you are waiting on the market or stock to make a move.
Shares of Medbox (MDBX, $58.88, up $18.93) have been on a roll as the weed business became legal in 2 states to start the New Year. Colorado joined Washington as legal dwellings where residents and tourists can smoke and buy pot, legally.
We looked at a number of Cheech and Chong stocks in 2012 when the medical marijuana business started to take off. Most of these companies are penny stocks and why we have never recommended them or played options on the stocks. Medbox might be the best known in the Mile High group as shares have traded to a peak of $100 in the past 52-weeks and as high as $215 in mid-November 2012.
With bitcoin trading at $1,000, it remains to be seen if Medbox will trigger this level on euphoria. Cult stocks can do scary things - both to the upside and downside. We don't suggest rushing out to buy any of these names as penny stocks are in the pennies for a reason.
Terra Tech (TRTC, $0.21) is a penny stock that is up 14% today and volume is mind-boggling. The average daily volume in this stock is over 2 million daily but is rising as over 10 million shares traded on the first day of 2014. The 52-week high is 66 cents.
Cannabis Science (CBIS, $0.08, up $0.01) and Medical Marijuana (MJNA, $0.17, flat) are a couple of other lottery plays that could pop or drop based on the buzz.
Prices on the devil's lettuce are surging in both Colorado and Washington and the trend for other states to join the party is gaining traction. Sour Monkey, Grand Daddy Purp, Chronic Thunder and other juicy weed names are replacing the classic party names of Bud, Jim Beam and Bartles & Jaymes many of the baby-boomers grew up with.
We've have spent enough time in the matrix talking about this industry and as an investment we will likely stay on the sidelines as these stocks do not trade options and are risky investments in our book.
The bulls are feeling gidday as the market is pushing new highs for the year. Of course, any rebound off the 3-day selloff is welcome news but prior support is serving as resistance so the bulls aren't out of the woods, yet.
The Dow is up 116 points to 16,542 while the S&P 500 is higher by 11 points to 1,838. The Nasdaq is advancing 36 points to 4,150 (bingo!) and the Russell 2000 is surging 11 points to 1,158. A close above 1,160 on the small-caps would be bullish along with the S&P 500 Volatility Index (13, down 0.55) falling to a low of 12.16 today.
We have talked about the possibility of higher fluff targets coming into play for January but we still need a few more clues as we build out our next batch of trades. We have a few open positions that we like into February and March and we have 2 New Trades we are adding to play a possible breakout to new highs. We are still cautious of the bears but the uptrends are still holding and we like the safety of these option trades.
Subscribers, check the Members Area for the updates and New Trades and we will be back in the morning with a fresh update.