The Weekly Weed Report (MMJ) w/ Dyro – November 30, 2016

Canadian Cannabis Stocks Update #MMJ

It’s been about a month since my last post and there has been a ton of craziness that has happened since the then.  I’m sure at this point anyone who is reading this has been invested in the space or has been at the very least following it.  Below is a table showing the share prices of the stocks I follow most closely and the dates of my “articles”:

ccs

As you can see once again these stocks had huge gains in a month with Canopy being the clear leader of the pack being up 133% since my last article. The reason why I list the highs this month is because for me if you weren’t thinking of selling some of these stocks on Wednesday November 16th before all of the multiple halts happened then you and I have big differences in our strategies. I’m not saying that there’s anything wrong with the buy and hold strategy but when stocks go up 100% in 2 weeks on no news you have to wonder when the good times will come to an end.  Having said that I did re-enter some positions and it is why I feel comfortable to write an article recommending buying again.

For any nerds out there I decided to do a brief analysis of the November 16 halt madness because I’m a nerd and what the hell right? Normal people can feel free and safe to skip.

ccs1

Aurora got it started off with a halt off of what I think is one of the biggest short squeezes I will ever witness. I think the short squeeze was industry wide and I also won’t ever fully know what exactly took place but I do know that these stocks are heavily shorted (see www.ShortData.ca)  and Aurora has no business being $3.80 a share.  Regardless the halt was on the upswing while shorts got their faces torn off and panic ensued to the retail investor.  This is why I think this analysis is somewhat important at the risk of being hyper nerdy.

ccs2

Notice the gap in time on the 1 minute chart. These are 5 minute halts and panic ensued most time.  It became a day trader and short sellers’ dream for the remainder of the day and the better part of the next few weeks.

After sell the halts were seen on ACB and CGC panic spread to OGI and APH:

ccs3

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To be sure November 16 will go down as a learning experience for all involved and perhaps briefly scared away retail investors and tamed some of the ultra bulls in the sector.

Moving forward I feel comfortable recommending some of these stocks again as the volatility has settled down and their charts are starting to set-up better after a period of consolidation. For those counting at home here is a general estimate of our LP’s current market caps.

ccs5

I think any of the original big 4 plays referred to as COMA are great for short term.

Canopy Growth Corp (TSX:CGC)

Canopy has been the sector leader both fundamentally and from a technical perspective.  They just acquired an LP applicant in Vert Medical and a Hemp business to boot (http://www.newswire.ca/news-releases/canopy-growth-enters-quebec-market-with-acquisition-of-vert-medical-599450061.html).  If Canopy has broken out, the sector usually follows it and I think their chart is looking the best with huge buying at the end of the day.

5-Minute Chart
5-Minute Chart
2 Hour - Chart
2-Hour Chart
Daily Chart
Daily Chart

OrganiGram Holdings Inc (TSXV:OGI)

Organigram just recently announced a partnership with the Trailer Park boys (http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aOGI-2424051&symbol=OGI&region=C) as well as an expansion that will see them more than quadruple their production capacity (http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aOGI-2427336&symbol=OGI&region=C).  With a recent raise done at $3.55 I see them as a great short term play.

Daily Chart
Daily Chart

Mettrum Health Corp (TSXV:MT)

Mettrum just announced a land expansion that sees them acquiring 20 new acres of land (http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aMT-2422550&symbol=MT&region=C)

Daily Chart
Daily Chart

Aphria, Inc (TSXV:APH)

Aphria has seen negative press lately in the form of a Vice article which outed them as supposedly having charged veterans more than “normal” patients.  Politics aside, they continue to have the lowest COGS by far and have upwards of $100 million in cash on hand to continue to add to their world dominance. I happily bought my Aphria shares back today much cheaper than I sold them on the 16th.

aph
Daily Chart

Keep watch for some of the companies who have shares that are becoming free trading. I continue to be very cautious to enter a position in Aurora (ACB) from both a fundamental standpoint (their awesomeness is priced into their stock price in my opinion) and for the fact that a ton of shares are becoming free trading in mid December that are way in the money

ac

 

This has often led to a self fulfilling prophecy in the past whereby the share price will steadily reduce ahead of that date. You can look back to Supreme’s chart the last few months and see their drop offs (and subsequent spikes) leading up to those dates where shares are becoming free trading.  Supreme is another company that long term I love but they have many shares becoming free trading at the end of December as well.  It’s not even a guarantee that the people who hold those shares are going to sell but it is my belief with experience over this past year that the market knows the date and the price falls leading up to it virtually no matter what.  Here is Aurora’s chart which I think is much more bearish than COMA.

With the task force having just delivered their report to the Liberals this is where Technical analysis rules as you can follow where the big / smart money is going. Are they moving in or out?

Stay tuned for another article soon as this was thrown together quickly because I think there’s some nice short term setups as well as the possibility of news coming from the Dundee conference on the cannabis industry that took place today (definitely follow @agriconsult for up to date news on the sector).  Keep watch for the Emblem IPO to come in the next week or so as well. GLTA.

Feel free to follow me on twitter @dyro01676 and don’t hesitate to school me on how much more you know! I wanna be as much of a sponge as I can. – Dyro

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