CRON: Tolerance for Higher Highs
CRON was downgraded to a hold earlier in the month because an analyst felt that the price action needed to cool off to prevent a bubble from forming. I'm seeing some smoke signals that the steam is beginning to build up again on this one. There's a very clear cup and handle going on here, and I don't think CRON has run its price too far up yet. I was holding when it caught fire, and I scaled in early in the morning before it really lit up to get some good profits on a day that the broad market indexes were flat to slightly down with a stop of 22.50 to catch half of what I made today if it drops 5%. I expect it's a strong indication of a single day breakout if it falls that hard, and it won't even come close to that if it's going to continue upward. I hope today's volume spike is followed up with another because the timid have been selling their profits off in after hours trading, but not hard enough to make me believe I'll get faked out on my stop by some wily desk trader or quant algo out there.
RSI is rising but still below the overbought 75 threshold. MACD is positive with a rising negative histogram, so this is still an early sign that investors should watch for fast signs of sharp pullback if this is just a one day run up. Directional momentum is showing +DI still holding out over -DI and the two are diverging again sharply with an ADX over 25 showing that the current bullish trend is in place and could quickly take back off again. Money flow is still tepidly negative from the analyst downgrade, but it's rising sharply and the contrarian investor in me says that's a sure sign of strong upward movement. Momentum has continued to be strong on this one since late December, and I don't expect that to change unless we actually see a strong correction or bear market sometime between mid-March to April, and I'm not sure there will be another bear market without a real reason for one that's not just the bad news bears digging up whatever possible bad news they can to spark up another correction before Summertime.
On the fundamentals side, CRON's deal with ACB to sell a piece of Whistler for shares has these two now joined at the hip under the MO umbrella. Analysts are talking up ACB like a street hustler, so ACB may be heating up again after alienating investors (myself included) with their last round of share dilution. Perhaps this will calm investors and also provide a pair trading possibility, but more time will be needed long term to be able to calculate the pair association between these two companies.
CRON also has an earning call announced for later this month on March 26, so we'll have some hints in the next couple of weeks how it will react to earnings. If it spikes up hard prior to the call, I'll take profit and run, and if it dips slightly before, I'm hanging on for dear life with reasonable stops. I hope to retain this current basket longer term than I have, but I'll hold a short-term stop set to retain my profits until they get sky high and then it's time for the long term rodeo with a parabolic stop and reverse risk management strategy taking over.
RSI is rising but still below the overbought 75 threshold. MACD is positive with a rising negative histogram, so this is still an early sign that investors should watch for fast signs of sharp pullback if this is just a one day run up. Directional momentum is showing +DI still holding out over -DI and the two are diverging again sharply with an ADX over 25 showing that the current bullish trend is in place and could quickly take back off again. Money flow is still tepidly negative from the analyst downgrade, but it's rising sharply and the contrarian investor in me says that's a sure sign of strong upward movement. Momentum has continued to be strong on this one since late December, and I don't expect that to change unless we actually see a strong correction or bear market sometime between mid-March to April, and I'm not sure there will be another bear market without a real reason for one that's not just the bad news bears digging up whatever possible bad news they can to spark up another correction before Summertime.
On the fundamentals side, CRON's deal with ACB to sell a piece of Whistler for shares has these two now joined at the hip under the MO umbrella. Analysts are talking up ACB like a street hustler, so ACB may be heating up again after alienating investors (myself included) with their last round of share dilution. Perhaps this will calm investors and also provide a pair trading possibility, but more time will be needed long term to be able to calculate the pair association between these two companies.
CRON also has an earning call announced for later this month on March 26, so we'll have some hints in the next couple of weeks how it will react to earnings. If it spikes up hard prior to the call, I'll take profit and run, and if it dips slightly before, I'm hanging on for dear life with reasonable stops. I hope to retain this current basket longer term than I have, but I'll hold a short-term stop set to retain my profits until they get sky high and then it's time for the long term rodeo with a parabolic stop and reverse risk management strategy taking over.
Comment:
I took profit on this shortly after market open. Comments about the current FDA chief resigning have investors spooked about the future rules of CBD development in the US, but investors in this industry space are easily spooked on mildly negative news. Expect it to come roaring back just as strong in the next few days on any excuse to print good news about pot stocks.