Cannabis Sector Shaking Off Hangover

 

The cannabis or marijuana sector has been in a protracted and very deep downturn. But recently massive buying has fired up key stocks in the sector and a new party may be underway. 

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 The huge gains are not abnormal in a beleaguered sector in the stock market. More often than not it's short covering as money decides to close out their positions and take profits. But there's something else going on here. 

                                                                                                               

If you take a look at the past three sessions you'll notice several things. First, the action is creating a range and the daily swings are enormous. We're talking gains, and the preceding declines, of more than 20% in the top stocks in the sector. 

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Opportunity emerges

The wide range presents an opportunity for traders who may attempt to profit from buying at the bottom of the range and selling near the top. So far it's a daily event that has been quite profitable. 

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But the wild range bound action tells us something else. It would appear that money is moving into the sector after the very long period of relentless selling. In the event those who are selling finish unloading it sets up the possibility of a longer term sustained up trend. 

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                                  Crave Investor research is monitoring the daily action looking for insights that                                                                                  investors of all kinds may use to execute risk managed transactions. 

 

CGC (WEED-tsx), ACB-tsx, CRON and TLRY are the sector's biggest and most well known company stocks in the marijuana sector. 

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