A student asked us to comment on either Glance Technologies GET or Canopy Growth Weed (Marijuana) companies. These are two Canadian stocks.
So here is our answer:
Marijuana stocks are on the move. Weed is a trending and controversial industry, that is undergoing intense scrutiny and regulation, while facing lots of market uncertainties. Nevertheless it is a very profitable industry and Walls Street is riding the wave of big profits. The thing to be most caution with this particular industry is that many of the marijuana stocks are for the most part penny stocks with limited liquidity.
Price and volume are very important factors to consider before trading or investing. Price: $5 or greater is better. Daily average volume: 350,000 shares or greater is better.
GLNNF vs. TWMJF
The price patterns of these two companies is bullish, but there is a key difference between the two.
GLNNF is in a pullback mode that started 10 days. Price has violated key support areas, and it seems like the pullback is most likely going to continue.
TWMJF on the other hand is completing a pullback and yesterday (Friday 12/8/2017), price made a tentative breakout with a small increase in volume activity. TWMJF looks like it wants to go higher, where GLNNF looks like is going to consolidate and possibly move lower.
Let's look the two tickers individually.
GLNNF Glance Technologies Inc.
Definitely it is in an uptrend. However the last run that pushed price up to 3.17 was a fifth exhaustion wave. Which means price is due for a 3-wave corrective move, before resuming the previous trend (uptrend in this case).
Right now price is experience the first pullback which actually violated primary support at the bottom of the channel (Image 1) and the bottom of the triangle (Image 2). Looks like price is heading for 1.31 support. If 1.31 holds, price could get a bounce back to 2.07. If it fails, price could drop down to test the 50 SMA (blue line) and the next support at 0.94.
On the other if price is able to return inside the rising channel, with the bottom of the channel becomes as your new support, you could see 3.17, 4.42 and then even 5.96 at the top of the channel (Image 3).
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TWMJF Canopy Growth Corporation
Price has being in a consolidation phase for a month, testing various support and resistance areas, including the bottom of the rising channel, which held support and pushed price higher.
Yesterday price was able to close above key resistance, now support, 14.61 (Image 1). It looks like price has even been able to poke out of the upper resistance trend line (Image 2). This could be the beginning of a breakout.
So if next week price is able to break out of the consolidation area (above 15.19), especially with an increase in volume, we could see a run up to 16.97, 18.82 and at some point even 21.07.
But if price fails to breakout and it moves below the 14.61 area, we are back inside the consolidation once again. At that stage this could push price a bit lower to test, first the bottom of the primary rising channel (Image 3) and, if support fails to hold price up, price could reach as low as 13.03, the 50 SMA (blue line) and the bottom of the secondary rising channel, somewhere near 11.50 (Image 4).
Good Trading!
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