Filter This!

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.

Filter THIS! …is 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?