When is it Time to Short Weed Stocks?
Long-Term Downtrend
Based on the long-term trend, I feel like we might see a good short opportunity in pot stocks soon. Of course, I could be wrong, and the bottom in pot stock could have already been printed. Personally, I will need to see a little more upside before I can be confident.
Strong Short-Term Rally
So far, things are looking good, and this rally is showing no signs of slowing down. Aside from being overbought, there is no good reason to go short just yet as a strong rally will stay overbought for a long time.
Bottoming Pattern
The long-term trend is downward. But it is nice to see that the price has climbed out of its long-term downtrend and has formed somewhat of a bottoming pattern. Perhaps we might see a change in the trends soon.
Is the Sky the Limit?
From the standpoint of investor positioning, it looks like the sky is the limit as there are no holders above the current price. Everyone is profiting. Basically, there are no more exhausted investors who have been waiting to unload their shares for break even.
Potential Technical Resistance Levels
There are no holders above today's high, so there are no supply resistance levels to watch out for. The only possible resistance levels will be pure technical levels to watch near previous highs where investors were willing to sell it the past.
The upper resistance line of a downward price channel is another technical level to watch for potential resistance.
If you follow market makers' exposure, then it would be wise to watch areas of large options exposure for potential resistance or breakout points.
When you look at the chart directly below, you will see that the price is at a confluence of these possible resistance levels that I have mentioned. This can be considered a possible strong technical resistance level.
Possible Change in the Trends
We at least need to see a higher high and a higher low print on the weekly candles before any long-term bullish trend can be confirmed. At that point, then I might consider long positions.
Conclusion
I am a fan of the cannabis industry. But as a long-term investment, I don't see any lagitimate value.
The more legalized cannabis becomes, then the larger the supply of the commodity will become as the demand stays the same. Simple supply and demand will tell you to stay away. But that doesn't mean a stock price can't rally. The market acts irrational very often.
Until we see one company dominate the market share in the industry, then I wouldn't consider any weed stocks for a long-term investment.
As for short-term swing trading. Weed stocks are great. They have huge swings in a relatively short amount of time. The current rally is still strong. But based on the long-term trend, I wouldn't consider any long-term hold personally. I could always be wrong, though.
So do you think there will be a good short opportunity in the near future.
Good Luck Trading
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you can't afford to lose. Give some of your investments time and know when to cut your losses.
Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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SpyderCallOP : @MindOverMatter
SpyderCallOP SpyderCallOP: check it out, dude...
This is how I'm looking at the situation. This rally is very strong, so I could always be wrong.
mizmo : yeah go ahead. go short all the weed stocks into Oblivion and take it right off the market. loser mindset
SpyderCallOP mizmo: It is not time to short yet. Check the second paragraph. The rally is still strong.
SpyderCallOP mizmo: I will consider a short position when this rally loses some steam, though.
SpyderCallOP mizmo: Past rallies in weed stocks were massive. But they didn't end well. Even with legalization broadening out to more states over time, weed stocks can't hold any upward traction.
SpyderCallOP mizmo: If you read the whole article, then you would see that I said more good things about TLRY than bad. My opinion is just negative on the stock and the industry as a whole. Even though I am a fan of the industry, as I stated I the conclusion.
TheDylz : Well acording to the time of the post you would have been dead on acurate. Only thing not acurate is that 100% profit post. Almost no long term investor is 100$ profit in TLRY that thing your looking at only shows for 1 day so its not acurate unless someone purchased all their shares under that small runup we had recently.
I have been in and out since it was Aphria and always sold for a profit but kept a base position at a fairly low cost and personally I dont mind the shorts. Go ahead and short because sooner or later you will have to buyback the shares and if you do during a run-up it will only help push the price higher and when these stocks get going they move fast.
SpyderCallOP TheDylz: So, was your average cost above 2.50 when I posted this? Because TLRY was at 12-week highs when I posted these comments. Didn't you average down during the rally that just happened?
TheDylz : Sold some during the run up and bought some back today….it was pretty obvious they had gone up too much too fast…oh and I meant in my first post that almost not 100% of investors had profit…when I’ve sold shares so far usually the profit has been in the 100’s of percent
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