Five Momentum Driven Canadian Licensed Producers -

Five Momentum Driven Canadian Licensed Producers

Nov 13, 2017Jeremy ParkinsonFinance0

TM editors’ note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Canadian marijuana producers have been one of the hottest places to invest and over the last month, this sector has been trading higher on very strong volume.

A lot of this volume has been on the buy side and this has caused momentum to surge higher. Currently, Canopy Growth (WEED.TO) (TWMJF), Aurora (ACB.TO) (ACBFF), MedReleaf (LEAF.TO) (MEDFF), CannTrust (TRST.CN) (CNTTF), and CanniMed Therapeutics (CMED.TO) (CMMDF) are trading at overbought levels.

This rally has caught the attention of many investors and we have seen tremendous capital enter the market and LPs have seen a significant increase in the average daily trading volume on a month-over-month basis.

2017 is Looking a Lot Like 2016

In early October, we published an article discussing how Canadian marijuana producers were starting to break out and that the rally was being supported by strong volume.

We are favorable on this trend and look back to the fourth quarter of 2016 to find a similar trend. If this rally is anything like what we saw last year, this could just be the start of a big cycle turn. One of the most important technical indicators we monitor is the Relative Strength Index (RSI), which measures a stock’s momentum.

As buying volume increases, momentum or RSI trends higher and this is a bullish indicator for stocks. If you look at this metric for Canadian licensed producers, there is a lot to be excited about.

5 Momentum Driven Marijuana Producers

We want to highlight how these stocks have performed over the last month and how volume has changed during this time.

Canopy Growth (WEED.TO) (TWMJF)

Over the last month, Canopy Growth has rallied more than 55% and the marijuana producer has shown no signs of slowing down. Last week, Canopy’s volume surged higher and the company traded more than 13 million shares per day on average (103% higher than Canopy’s average volume over the last month) and we are monitoring this trend closely.