CRON - after the craze, time to short?

As you might know, I have written at length about marijuana companies and I am still very much positive over the long term.

Today however, one of my favourite stocks CRON, is presenting us with a very good opportunity to gain over the short term.

Following their deal with a major tobacco firm (Altria) in December, CRON has started to increase in popularity and since then, it continued to reach higher highs and saw its price increased by over 150%!  

Although as I said that I am positive about the sector over the long term, I think it’s not common that we are presented with a huge opportunity whereby we also gain on the downside.

Personally, I am expecting that following an average increase of 5% per day in two months, we will have some short-term declines in value.

As we can see from the chart, RSI is heavily overbought – similar situations happened before massive price drops in August and December of last year.

The Average True Range is also on the rise and signals increase in price volatility thus a higher expectation of a possible inversion in prices.

Furthermore, yesterday the price managed to reach $25 however it looks like it was resisted as price pulled back to $23.

What do you all think?

 

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1 - Comment

InvestingMoney .biz - 05 febbraio 15:35 Reply

The stock has opened 8% less han yesterday's close!! .. let's see how this is going to end...