Late last year while Bitcoin was grabbing almost all the attention the cannabis stocks made some massive moves breaking out of a year long consolidation. We covered that break out in two separate articles on nextbigtrade.com and those trades were some of our most profitable trades of the year.
From studying Stage Analysis we know that besides the initial break out into a Stage 2 uptrend that next best time to buy is after a consolidation. This is depicted by the picture below where point A is the time to get in when the market breaks higher on an increase in volume.
Source: Secrets For Profiting In Bull And Bear Markets
We’ve now had another multi-month correction in the cannabis stocks and last week they started showing signs of a potential 3rd major upleg. Both TWMJF and APHQF moved higher on big volume. TWMJF in particular is interesting because it acts like the leader of this sector and actually was the first major cannabis stock to break out during the big move higher in late 2017. Once again TWMJF is very close to making new highs and should drag the rest of the sector with it if it does.
Disclosure: I am long shares of TWMJF and APHQF.
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