The National Marijuana News would like to welcome a new contributor to our finance section. Charles Moon of Prosper Trading Academy is a near ten year veteran in educating traders on how to technically analyze stocks and pick positions, and we are delighted to add his insights to TNMNews Finance.
Hello everyone and welcome! My name is Charles Moon and I am the head instructor for the Penny and Cannabis Stocks room with Prosper Trading Academy. You may have seen our company CEO Scott Bauer on Bloomberg Financial, Fox Business and BNN along with other media outlets. I myself am a contributor on BNN and for the CME group. I hope to contribute information and trade ideas that help you the reader see how I help my clients on a daily basis.
Cannabis has been the talk of traders lately. From retail traders to institutional trader, there has been a high demand for information and how to trade this sector. I hope to provide some insight and theory behind how I approach trading this sector in particular. The recent news has been great for cannabis names and I intend to take advantage of the newly found volume
The former speaker of the house John Boehner made huge headlines for the marijuana industry when it was announced that he will join the board of Acreage Holdings. He stated that his thinking of cannabis has evolved. From filling up prisons to helping out the veterans of our country, he felt he had to take a stance to deschedule cannabis from its Schedule 1 status (which is utterly ridiculous but that will be another story). The face of the GOP is now pushing to legalize cannabis. I would have never thought this was possible and yet here we are. This news alone has caused a major in-flow of buyers into the cannabis stock names. Stocks like Cronos Group Inc. (CRON) and ETFMG Alternative Harvest ETF (MJ) along with Aurora Cannabis Inc. (ACBFF) and Canopy Growth Corporation (TWMJF) saw huge piles of cash come flying in on the buyside in a very short time period. Here is the beautiful thing, these stocks are still getting speculators jumping in and I can see this continuing. We can see even larger amounts of in-flow if we get more GOP love for the sector.
Seeing that we are in the beginning stages of a possible commodity that can generate billions of revenue and help whittle down that pesky national debt. This sector can generate as much revenue as tobacco and alcohol combined and frankly also drastically lower crime rates. Heck, we can even see lower amounts of speeding tickets and fatal car accidents caused by excessive speeding or drunk driving. Don’t get me wrong, drivers CAN get DWI’s for being too high. The point I am getting at is that the conservative party is also recognizing this along with the financial industry. When big money gets very interested regardless of the reason, I get very interested. As a shorter term trading coach focusing on this sector, I do look and follow the fundamental news on these companies. When I trade the cannabis names, they are more shorter term and there is a reason for this. The primary reason behind the short term plays is due to opportunist. Traders are jumping in and out of these names based on recent news. The problem has been when they take risk off / profits. If the stock normally has lighter liquidity resting and a large outflow takes place, it can shift the stock prices quickly. It will also alert other traders to start unloading their positions. Then you face a situation of holding onto the name and tying up money for the long term, or to put that money into use for other opportunities. On the longer term spectrum, I love the upside value this sector offers versus the over inflated macro market.
As a trader and as a long term investor, the upside projections in the cannabis sector offers up a wonderful opportunity for yield in the near term and long term. The investor will have to be very patient in my humble opinion. With the likes of Jeff Sessions as the attorney general and his hardline stance against cannabis, it will be tough for the this sector to progress any further towards federal legalization. The sector is too dependent on news centered around the one guy that clearly has no clue about cannabis. This is why the sector will have a difficult time in the United States for now. The current sentiment is only gaining more momentum for full legalization. The money generated from taxes are already making substantial differences in the states that have fully legalized the use of recreational cannabis. I believe within this decade (if not sooner) we will have our federal legalization. Those that choose to invest properly will benefit like no other. I treat the cannabis stocks like biotech names but with a greater chance of a positive outcome. If you are interested in this sector, here are some names to watch:
- Cronos Group Inc. (CRON)
- ETFMG Alternative Harvest ETF (MJ)
- Canopy Growth Corporation (TWMJF)
- Aurora Cannabis Inc. (ACBFF)
- INSYS Therapeutics Inc. (INSY)
- Cara Therapeutics Inc. (CARA)
- GW Pharmaceuticals plc (GWPH)
GWPH has already benefited greatly on their breakthrough with CBD. The rest are waiting for the true green rush that will be coming. It is no longer a question of IF, but now a question of WHEN. I speculate the “when” will be sooner than later.
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