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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