Could these pot stocks be about to turn the corner? Check out $IIPR and $CGC (January 09, 2020)
CGC IIPR
I want to look at a couple pot stocks here. These are not strong buys right now; these are more ideas of stock that might just be coming out of the bottom. Unless you just were in a cave for the last couple of years you know that pot used to be a really hot commodity but over the last year or so not so much. All of these stocks really just took it in the shorts. Some of them, and Canopy ( NYSE: CGC ) is one of them, I will show the other in a second. Some of them look like they are starting to turn so I thought I would mention this.
You can see with Canopy ( NYSE: CGC ), look at the big massive volume here. It is very, very obvious when you started to see some institutional interest in this, again, on the buy side. I look at this as a definitive bottom. That’s well below, on a percentage basis, where we are right now but that’s not the point. The point is, this stock hit a big low, came back, fell again and now I am looking at this as an inverse head and shoulder pattern. Left shoulder, head right here, right shoulder.
I will say this, if the stock breaks out above this neckline or we’ll just make it easy; this is the high here at 21.65. If this stock breaks out above 21.65 I think it is likely to be going a lot higher. For members, I am going to set a price alert at 21.65. And then what you will get when the stock breaks through 21.65 is this little snippet of video telling you what to do. And what I am telling you to do is, buy the darn thing. And then just make sure you are protecting your position so you are not risking a lot of money if it turns out to be a false breakout. But this allows you to get into the stock early.
The other one that I wanted to show you was this one ( NYSE: IIPR ). A similar pattern here and so it is a similar trade. On this one, I am looking at resistance at $80.00. This is kind of the pick and shovel company; that’s the equivalent of the gold rush, where the people that really made all the money back in the gold rush days were not the miners it was the people that were selling the pickaxes and the shovels and everything else.
This is what Innovative Industrial Properties ( NYSE: IIPR ) basically does, where you rent their properties to grow this crap. I am looking at $80.00 as resistance here. If this stock starts breaking out above there that’s your bogey. You have to be patient because these stocks aren’t going to rocket up right away and they may not rocket up at all. But if this truly is a bottom, and I can make the same type of argument here as far as an inverse head and shoulders pattern. It is quite different, but left shoulder, head, right shoulder, and then that gives you a neckline right here. So any kind of move above $80.00 completes the downside move and the stock will be ready to go higher.
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