Buying Stocks In A Strong Sector That Haven’t Broken Out Yet: Cannabis Edition

Cannabis stocks are on fire after TWMJF led off as the first stock to break out.  A hot sector can provide a lot of trading opportunities.  Instead of chasing the leaders in a sector you can often buy laggard stocks that will get pulled higher by the large amount of money pouring into the sector.  This works especially well with commodity sectors where all companies in a sector essentially produce the same product.

OGRMF and SPRWF are two good examples of this as I fired off a tweet about these stocks earlier today.  I bought them both in anticipation they would follow the leaders in the sector higher.

With both stocks you can see clear resistance and support levels just like the leading cannabis stocks, but they hadn’t broken above resistance yet.  Both stocks had great volume today and OGRMF had a nice consolidation at the high end of the range leading into today’s breakout.

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3 thoughts on “Buying Stocks In A Strong Sector That Haven’t Broken Out Yet: Cannabis Edition

    1. Hi Justin,
      Would you mind posting on uranium? On the weekly there was very large volume last week but pulling back this week and URA ETF is on a flat 30 EMA on the weekly.
      Hope you can post when you think it is time to enter this sector (I am assuming we still need to see more volume on the weekly and have the 30 EMA start to turn up on this etf and individual uranium stock charts).
      Thank you!

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