Last week marijuana enthusiasts and investors got quite startled by White House spokesman Sean Spicer’s statement, mentioning that recreational marijuana is going to be subject to “greater enforcement”.
The news hit social media and news websites like a tsunami wave causing panic across the industry. Is this really the end of the weed industry, or is it an opportunity to get in on the fun?
Before we give our analysis, we would just like to say that we are not financial experts, nor do we give financial advice. The team here at marijuanabreak.com have a trading background of over 10 years, and we’ve been investing in Pot stocks for quite a while. We trade using fundamental and technical analysis and don’t bet on random penny stocks, unless they have extremely high potential. We are all cannabis enthusiasts and that is why we’ve created the community and website, to provide you with canna-related information, including money tips, growing tips, reviews, buzz and more…
Related Article: Become a Pot Stock Trader
The Overall Picture
While it may seem like Friday was a major setback for the cannabis industry, the focus of the statement was around recreational use (and a bit on medical).
We are big fans of recreational marijuana and hope that one day the whole of the U.S will be legal, but until then we have to focus on what’s happening. Most big pharma companies and low volume companies (pink stocks) are mostly medical related. Vast amounts of money are pouring into this industry to find cures for various diseases. Sure, everyone wants a part of the action, and it’s unfortunate that these companies are in it only for the money. BUT, that is not going to change. Greed has got the better of them. Until there isn’t a complete change in everyone’s mindset, all we can do is hope that marijuana is legalized soon and cash in on any opportunities. Do you really want to miss out on the action?
Many Cannabis related stocks took a blow on Friday, but it is important to look at the overall trend in the market. If you observe the high volume canna stocks, you’ll see that some of them barely dropped, while other high volume stocks closed in gains. This is a very positive sign for the industry. Remember that the market always prices in investor’s expectations, which doesn’t look so negative as previously thought.
Take a look at CARA and ABBV, and you’ll see what we are talking about.
Other Penny related stocks, dropped but regained the majority of their losses throughout the session. Take a look at CNBX.
What Does This All Mean?
After every major news event it is always important to play it safe. The next couple of days will shed light on the industry, as of now there is too much money invested within the industry for it to suddenly collapse. Here at Marijuanabreak, we are currently seeing the recent declines as an excellent opportunity to buy in. But it has to be done with caution.
How to Buy Low?
Again, we are not financial advisors, but the idea is to jump in when the market creates a pull-back. We use a variety of different tools including Fibonacci to analyze stocks and examine the length of the pullback. Thereafter we jump in on any upcoming trend, once we get a clear buy signal.
This trading week will be an interesting one, and if the declines don’t extend, we could be seeing many marijuana related stocks setting up for another move higher.
As of now let’s wait a couple of days and see.
Want to Learn More About Pot Stock Trading? Check out our Comprehensive Online Course.