There is a reason why I like this name right now, and I am going to explain why it is a great opportunity for the near term.
We have seen a strong inflow into certain names in this undervalued sector the last few weeks. What I am noticing is how the trading volume is picking up throughout the sector. Not all stocks are responding the same way, but we are clearly seeing the inflow coming in. I spoke on a few names last week and they are performing okay at the moment. I want to state my case for another name I can see returning a nice percent fairly quickly.
Let’s take a look at General Cannabis Corp (OTC:CANN) out of Denver, Colorado. This company is basically a Swiss army knife for producers and distributors. From security to marketing, they can handle all of the above and can be a major asset for small businesses and corporations alike. Besides the fundamental strength and stronghold this company has in Colorado, I love the trade opportunity that is being presented. I am a technical based trader. While I appreciate the fundamentals behind companies, it only plays a small role in my speculation. Below I am watching the stock on an hourly chart.
I have highlighted a few things but let me break them down for you. The $4.40 mark was short term resistance while the higher $4.50 price was previous resistance. When resistance level tier down, that is a very strong sign of weakness. The green bars on the left highlighted by the shaded white rectangle shows where the majority of trading volume was distributed. The stock did not continue lower and instead started to settle. Once the stock started to recover, we breached resistance levels, and in fact found immediate support at the upper resistance range.
That is very bullish. Volume also has picked up and those indications combined with my methodology has led to a trade signal. A signal has been generated to buy CANN at $4.75 or lower with a stop at $3.80. I define the risk on any signal I take since I am not perfect. If the stock remains above $4.40 it remains a buy in the near term. The stock would have to traverse through a weeks worth of active buying and really would have to turn fairly negative quickly to stop me out.
I will look around $5.40 or higher to take partial profits on my first target. With stop adjustments once profit is taken, I will treat my remaining shares like a chinese buffet. All you can eat. I believe if CANN trades above $5.85, then the $7-8.00 mark is realistic. Only time will tell how we do on this signal but I like the opportunity being presented right now. If you enjoyed my previous ACAN or MEDFF signals, then you should strongly consider my signal for CANN.
I also wanted to give a quick update on the MEDFF and ACAN. Currently both are above the entry points I had suggested. My ACAN entry price is $3.24 and the stock is currently up around 18% for me since my article last week. The MEDFF position is up around 8% since my article last week. I have taken partial profits on both and have adjusted the stop to reduce the open risk on both signals. If you are in either trade, I would suggest doing the same. The aggressive trade management would be putting the stops to break-even to your entry price. I am allowing a little bit of room to breathe in both names but will still walk away with profits if either stock pulls back significantly.