The TDR Three Key Takeaways regarding Cannabis Stock Market and Dan McDermitt from TheChartGuys:
- Dan McDermitt from TheChartGuys highlighted the U.S. cannabis market’s struggle, particularly with MSOS, noting that bulls must breach the $7.52 and $7.58 necklines to regain control amid a potential weekly bear flag.
- McDemitt stressed the importance of Trulieve breaking above $10.80 to confirm a bullish trend against the current lows and instill confidence in investors.
- McDemitt emphasized without new information breaking these levels, GTI remains in a sideways pattern, reflecting the broader uncertainty in the market.
Last Friday’s episode of the “Trade to Black” podcast featured a technical chart analysis of the cannabis stock market by Dan McDermitt from TheChartGuys. McDemitt’s expertise provided a comprehensive look into the current volatile state of the market, highlighting both challenges and opportunities for investors.
McDemitt emphasized the ongoing battle within the U.S. cannabis market, particularly with the ETF advisory shares MSOS. “Right now it’s essentially a battle as to whether or not it’s a weekly bear flag,” Dan explained. This sentiment underscores the struggle faced by bulls, who, despite a weak bounce, are defending critical support levels. He noted that for bulls to regain control, they need to breach the $7.52 and $7.58 necklines.
Turning to individual stocks, Trulieve (CSE: TRUL, OTCQX: TCNNF) has shown some resilience compared to its peers. Dan pointed out, “We got a support zone right now, $9. You can see we held $9.01, $9.04. Today we held $9.10.” He stressed the importance of Trulieve breaking above $10.80 to confirm a bullish trend, providing a cushion against the current lows and instilling confidence in investors.
Green Thumb Industries (CSE: GTII, OTCQX: GTBIF) also drew attention, with McDemitt noting its position is similar to that of MSOS. He highlighted the critical support and resistance levels, stating, “For me, it’s $10.66 support and $12.91 resistance.” Without new information breaking these levels, GTI remains in a sideways pattern, reflecting the broader uncertainty in the market.
Curaleaf (CA: CURA, OTCQX: CURLF), however, presents a different story with its relative weakness. “Curaleaf has been relatively weaker and that’s just because we do keep hitting fresh lows on this pullback,” McDemitt remarked. This consistent downtrend, with key support at $3.57, positions Curaleaf as an underperformer compared to other major MSOs, highlighting the varying degrees of challenges across the sector.
Canopy Growth (TSX: WEED, Nasdaq: CGC) offered a glimpse of potential amidst the bearish trend, experiencing a brief short squeeze. McDemitt described this movement, saying, “Whenever that’s happening on a daily chart that is this week, you know it’s just some quick forced short squeeze, but quick and small is the keyword.” The persistent rejection at the daily EMA 12 resistance indicates that bulls have yet to make a significant impact despite defensive efforts at the $1.60-$1.65 support level.
McDemitt’s technical analysis background complements the work we do with fundamental research at TDR nicely. He advocates for a disciplined approach, advising investors to sell during euphoria and buy during periods of fear. “Just trim, just sell some. And then you got cash to rebuy fear,” McDemitt advised, highlighting the cyclical nature of market emotions and the importance of maintaining a balanced portfolio.
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