Bigger Picture

CBGI — I tried to buy this in the model portfolio at .173 as volume began expanding on probes above the narrow range. Unfortunately, some sort of bug is preventing that. It should be resolved soon, but meanwhile, here is my note accompanying the transaction: “Reacted nicely Friday off of its .19 pullback target. Firming off of session lows on expanding volume. Would be concerned if .19-.20 wasn”t recovered through today”s close, and/or tomorrow”s open.”

More follow-ups to setups I noted among Activity Feed comments…
CANN — Volume was a little light on the open”s bounce off of the 22 area up to 25. Another dip to 24 was likely, which should launch a better upleg… The dip back to 24 actually touched 23.50, and recovered to fresh highs at 25.65.
PHOT — Stalking .52 for several days, which finally arrived this morning. But consolidating around it down to .502 has formed a Descending Triangle that is vulnerable to probing a little lower. Longs should be nervous until recovering .535-.54, preferably today.
ERBB — Noted how Friday”s action had ignored resistance from its three-day surge. That is only more so this morning.
TAUG — Its early dip to .085 concerned me that it might fill the gap down to .07 before rallying. A bounce has since resolved down to .077, making the gap that much likelier to be filled.
Also…
RFMK — Testing .83 breakout level on second consecutive upday of expanding volume.

TRTC — Gap up to .996 has extended higher to test 1.05. Pullback limit is now .95 down to .90, where an intraday dip would still be likelier to recover than to reverse back to Friday”s .88 close.
GWPH — Was it 5 minutes, or 5 seconds, after adding to the model portfolio that a big volume break probed under 60.45 support. Must close above 61 area for this to be just noise around the pullback”s target, and therefore an end to the pullback. Will not hold long if any further signs of deterioration. Rally back up through 61.75, and the danger likely will have passed.
ENRT — I like the support being tested by today”s break, but it”s premature for this sort of break to recover already. Monitoring.
ATTBF — Volume expanding into a deep slide to 1.75. Resistance is 2.05, and not recovering it would keep alive the potential to 1.50.
CBGI — Digging a little deeper this morning. Back above .19-.20 should begin the recovery, especially if accompanied by expanding volume.

Filter THIS! …a pre-open missive that tells you one thing, the most important thing, if you had to filter your view of today”s marijuana stocks price action through just one thing — okay, sometimes two — what would that one thing be?

Today”s one thing is…contrarian.

A stock”s price trend is the process of developments eventually convincing a majority of the company”s success, or its failure. When the vast majority is in agreement, then only a tiny minority remains that could yet be convinced of the same thing. Like a game of musical chairs, suddenly “the music stops” and price begins falling when the market discovers that demand (buyers) has shrunk.

Monitoring for these situations is contrarianism. Last week”s plethora of thee-day surge setups was exactly that. Many stocks had rallied sharply in a very brief time. More and more buyers were convinced that prices were significantly undervalued. Fundamentals weren”t being reported as improving so rapidly. Rather, rallies went into hyper-drive as buyers made their decisions based on direction instead of on future value.

Even without supply (sellers) increasing, the rallies peaked. And then they began reversing down. Contrarian analysis searches for setups that have become similarly lopsided. Last week”s buyers aren”t necessarily wrong about the future success of those marijuana stocks they drove sharply higher. They were wrong about the present value of that success.

On the way up, prices rose dramatically because rising prices began outweighing news as what convinced more and more to buy. Guess what: Contrarianism cuts both ways. On the way down, falling prices can become equally convincing to sell. And not just sellers, but reporters and analysts. Here are two stories that greeted the weekend:

http://www.fool.com/investing/general/2014/03/22/are-there-any-good-marijuana-stocks.aspx
http://www.usatoday.com/story/money/markets/2014/03/20/bloom-off-of-pot-stocks-on-wall-street/6662003/

Those “overbought” situations probably aren”t yet fully corrected. Some of those big performers might not recover, at all — not deserving to rally on their own merits, but swept up in the sector”s scattershot euphoria. Risk isn”t gone entirely, and never will be, but it”s less.

Get a few more stories like those, the perpetually nay-saying writers screaming “told-you-so” (ahemcodyahem). That contrarian scenario would be equally capable of lifting price back up. Just convince enough “weak-handed buyers” to sell, get negative opinions everywhere you turn, and then the bottom will be in.

A lot of stocks are covered, in the order listed below in case you want to scroll forward (it”s 40 minutes long, taking advantage of extra weekend time to review more names). I”ve replaced a category so that the three are:

(BO) Breakouts and breakdowns — Stocks that probed above or below their recent range… More to come, or just noise?

(PB) Pullbacks — Stocks that have ended one leg, and are now correcting lower, presumably before resuming their rallies with another upleg.

(EA) Early adopters — Stocks that haven”t been on the radar recently, but might be soon… What specific price behavior to watch.

ATTBF BO
CBIS BO
DEWM BO
EDXC BO
ENRT BO
ERBB BO
EXMT BO
FITX BO
FITX BO
GRNH BO
ICBU BO
MCIG BO
MWIP BO
RFMK BO
SKTO BO
STEV BO
VAPE BO
VAPR BO

AEGY EA
CANV EA
EAPH EA
FULL EA
HEMP EA
MJNA EA
MNTR EA
NVLX EA
SPLI EA

ATTBF PB
BRDT PB
CBDS PB
CBGI PB
GWPH PB
PHOT PB
TAUG PB
TRTC PB

Keep your feedback coming. Glossary/FAQ should begin coming available on-site tonight. I”ll announce it at the time. “Afternoon Rush” is getting popular, the pre-close Q&A of stocks you need to know something about quickly. When I have live chart display (soon), then we”ll add a post-open “Morning Rush” to the mix. Enjoy!