I will start this week's blog with a look at a chart of the Venture Exchange. It was back in March when the exchange topped out hitting resistance at the previous high set back in August of 2016 and thus began and slow grind lower, which seemed to affect the Marijuana related stocks more heavily than others in my observations.
The exchange is slowly working its way to support at around the 750 level set back in November of 2016. As the exchange approaches this level I have noticed support starting to come in for many of the Marijuana related stocks as well as stocks in other sectors and is something many of my fellow tweeters have commented on directly to me this week.
Two stocks in general ($MYM.ca and $MJJ.ca) have had major runs tacking on daily double digit gains before hitting resistance and pulling back to support levels. Both stocks generated huge returns for those that got in early and continue to generate big gains for the day traders.
Other stocks in the Marijuana sector that have seen decent short term pops include $NF.ca (which pulled back after running a bit), $N.ca (which showed renewed strength today) and $ISOL.ca joining the group late day.
I am some what encouraged with what I am seeing in the micro-cap sector this week and will be looking to see continued increased volume and trading activity.
Favorite Trading Setups
This week provided two of my favorite trading setups that I would like to discuss. The first involves a stock that starts to grind lower on no news followed by one seller with a large position throwing in the towel and driving the stock lower.
The first company is $APP.ca (Global Cannabis Applications) and from this chart you can see the stock recently had moved up to the $.12 cent level before starting a descent lower causing one large share holder to throw in the towel on the forth day, dumping shares at $.075 cents. This was at the lower end of the range the stock had recently traded in and along with the volume provided an attractive entry point. I picked up 150K shares and was able to sell 100K shares the following day at $.10 and $.105 and still hold 50K shares at the time of this writing.
This set up works at least 90% of the time for me, but the signal to buy is only one seller driving the price down and multiple buyers stepping up to provide support.
The second company is $TMD.ca (Titan Medical) and from the chart you can see the stock had a sudden drop due to the announcement of a private placement at $.15. There were multiple sellers driving the price lower than the PP price, keeping the stock price suppressed. This is not uncommon as often their is concern the PP will not be filled at the PP price and might have to be repriced lower.
Yesterday the stock was selling off with an ask at $.13 when the company announced the PP was closed and filled at $.15. Given the stock was now $.02 below the PP price, the $.13 cent ask provided a very favorable entry point. I did enter the trade at the $.13 price and exited today at $.14 and $.145 as I had concern their might still be selling and did not want to hold going into the long weekend. Also the company did announce a consolidation was in the cards and I hate those situations. Having said all that, the chart looks favorable for more upside.
Company of Interest
With 3 minutes to go before closing, $GKX.ca (Gemini Corporation) put out a news release saying they had won $15 million in new business to be completed within 2017. I normally do not buy a stock late day on news, but with such a large dollar amount attached to the news and the stock trading well off recent highs I took a short term trading position at $.105 average.
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