Bigger Picture

Today”s filter is…Snapshots and Bigger Pictures

One of the reasons that makes weekends great also make them obstacles to starting Monday on the right foot. A lot has been happening in the marijuana sector. Let”s bring back to our frontal lobes some of the recent developments that the weekend might have tucked away in the deep, dark crevices of our brains.

Tough week at the office, dear?
Bigger Picture — A “risk-off” mentality had begun the prior week, and extended for most marijuana stocks through Wednesday. Then a number of stocks began meeting pullback targets, with several popping Thursday and/or into Friday”s open.
Snapshot — Last week”s lows must hold if retested to avoid turning the sector defensive in a much bigger way. Meanwhile, we”re assuming that pullbacks are ending and another upleg is forming.

Trading is trading. Investing is warehousing.
Bigger Picture — The marijuana sector is brimming with interesting investment stories, but not as many interesting trading opportunities. What”s the difference? Some stocks are ranging randomly within narrow ranges, waiting for the next news development to justify breaking higher. Some stocks only recently got a higher-profile, and have only two or three brief uplegs. Whether it is lack of volatility, complexity, or history, both groups are missing an actual pattern that identify buy triggers and their targets.
Snapshot — Don”t “force a trade” in a stock based on its investment story. Rather, take advantage of recent volatility to buy stocks that may have moved too quickly too far from their prior uptrend, for the likelihood of retracing some of the drop. We”ll also want to buy stocks that are doing more than just retracing drops, and those that are breaking triggers above their range.

Goose, goose… duck!
Bigger Picture — Higher-profile drops in our sector like FULL and CANN, and recent trading halts, make the sector a little more difficult for attracting new investors. Good. Bad for those stocks, but good. More people are left on the sidelines to be attracted by good news.
Snapshot — By the same token, those stocks aren”t going to be on our trading radar. Their patterns are broken, and now more history must be accumulated by simply the passage of time before they become predictable for trading.

We”re starting to introduce more actionable intraday ideas. Look for the post-open review of stocks we”ve been stalking, or that are doing something noteworthy.

Today”s video isn”t so much an update of current opinion. We do discuss the more widely followed stocks that are among the most often requested by subscribers. But we do so in the context of what I identify as bullish volume and price action, what missing action would build confidence in taking a position, and what action would undermine the pattern.

It has been an interesting couple of weeks since launching this service, Marijuana Stock Technical Trader. Two weeks that began with the tail-end of another strong upleg, and led into a choppy pullback. I hope that my presence was of value to you.

We”re still adding features, and I”ll be writing back to announce each over the next several days. As always, please don”t hesitate to tell me what you and don”t like about any part of the service. 

Meanwhile, enjoy!

AFTERNOON RUSH –notice the running time– –3:15-3:3:35 ET–
Is a stock”s price action today concerning or interesting you to consider taking action? You might already be able to find relevant parameters by scrolling the Activity Feed (you should be doing this anyway). If not, then post the symbols and specific questions (please, not just symbols) to this Alert”s comments section. I”ll answer those that allow me to address the most questions in the brief window available. I”ll start at 3:15pm ET.

Observations of opening action in context of my current parameters:
RFMK — Opening pop-up is in-line with the bullish setup
EDXC — Already retesting yesterday”s high on higher volume
ATTBF — Huge pop-up, huge volume
BRDT — Gap down bouncing from .535 support, but opening weakness at this stage of this pattern is a concern, and there”s a problem if it can”t rally well into positive territory today.
PMCM — Open”s pop-up is hesitating at .0048 resistance
SKTO — Trying to get through yesterday afternoon”s highs to run
ERBB — Gap up confirms pullback target held, new pullback limit is .075
STEV — Gap up above yesterday afternoon”s high on decent volume
EAPH — Healthy opening surge
TAUG — Still something wrong in this pattern
ENRT — Opening surge from .47-.50 support on expanding volume
TRTC — A little too slow to exploit recent strength, still monitoring

Today”s filter is… There”s no “I” in marijuana stocks.

Wait.

There”s no upper-case I. Well, so long as the word isn”t spelled entirely in upper-case. Okay, there”s no “you.” There”s a “u,” which I suppose would work phonetically.

Look, my point is that marijuana stocks don”t know where you bought them. They don”t know whether you”re sitting on a profit or a loss, whether you”ve averaged up or down, if this is the third time you”ve made a stab at picking a pullback”s bottom…

We”re trading the stocks, not buying the companies. I”m in favor of allocating part of one”s longer-term portfolio to buy-and-hold for the sector”s longer-term upside potential. But here we”re trying to exploit the unusually wide intraday and weekly swings this sector has been displaying.

If you have a pullback target in mind, which the stock reaches, and you dutifully buy it there — don”t expect the stock to uphold its end of some secret pact by suddenly reversing back upward relentlessly. Or, if you have been waiting for a specific target price to be reached before peaking, so long as a specific pullback price were to hold, and one or the other is touched or pierced — then don”t rest assured that the stock will return to whatever past price you might wish you had sold earlier.

When you make the decision to get in, make the next two decisions about when you”re going to get out. How high will you ride a rally, and how low will you tolerate a reaction down. Stocks don”t necessarily wait for us to decide what prices we want after they”ve already been there.

There”s not always a “do over” in marijuana stocks. Actually, let me just check that…

Yep, not a lot of those.