Technical analyst Clive Maund charts movements in the cannabis sector after the Nov. 8 legalization votes and the appointment of anti-cannabis firebrand Jeff Sessions as U.S. Attorney General.
For those of you who have spent the past 6 months living in a cave, you are probably not aware of the fantastic gains that have been made in cannabis stocks. At clivemaund.com we had already figured out that the sector was set for huge gains ahead of the November 8th legalization vote as far back as April, and subscribers were directed to various stocks which went on to make spectacular gains. If you want to review what we achieved click here for a free download.
The cannabis sector has done pretty much as expected in recent weeks. After the huge gains into the multi-state vote on legalization on November 8th, this heavily overbought sector has started reacting back and may be forming a top. The votes on legalization went well (only Arizona voted no), which certainly augurs well for the sector over the longer-term, but this outcome was expected so the vote became a “sell on the news” event that triggered heavy profit taking, which even started to kick in several days before the vote.
The following charts, courtesy of marijuanaindex.com, are most interesting and make clear how the sector has topped out, at least for now, and the big question is whether the sideways pattern now forming is a top or a consolidation. Here it should be pointed out that we were long many stocks across the sector months ago, and sold out for massive profits around the time of the vote on November 8th.
The North American marijuana index shows a large top or consolidation pattern, which looks like a flat-topped broadening …read more