Are Weed Stocks Back? $MSOS – April 17, 2024
This is Scott a StockMarketMentor.com and your Chart of the Day. I want to take a look at some weed stocks ( NYSEARCA: MSOS ).
This is a collection of US cannabis operators. A lot of those operators trade over the counter and so this is a nice vehicle if you don’t want to trade OTC stocks. Now, as a lot of you know if you have been following the cannabis space, it’s been a dark place for a long, long time. MSOS ( NYSEARCA: MSOS ) launched here in 2020, it ran up, and then with the rest of the market it kind of puked and did it for a long time.
It’s been a bit of an ugly trade, one that you’ve really wanted to avoid at least until September of last year when it started to firm up and really chopped around this black line, that’s the 200-day moving average. I’ve talked about MSOS ( NYSEARCA: MSOS ) before. I think I traded this a few times but ultimately traded out of it.
One thing that really catches my eye is the fact that the stock market, the general stock market, SPY ( NYSEARCA: SPY ) is down today, but MSOS ( NYSEARCA: MSOS ) is up. That’s not all, we are also seeing strength in MJ ( NYSEARCA: MJ ), which is another cannabis ETF. It’s holding up right around this 50-day moving average.
So I definitely think these stocks should be watched right now. And I definitely would want to define my risk on this, at least to around that 8.50 range. That’s the swing low of this recent active sequence. I would want to see, definitely a higher high, with a break above, let’s say, 9.58-9.60, hold above these moving averages, and have that 50-day curl up;
And then eventually you would want to move that stop up and make sure you take that risk off the table, if possible, just in case we get some negative news about this sector and it rolls over and maybe comes down here into this 200-day moving average zone.
That’s just one way I’m looking at some of the cannabis stocks here right now. I know there’s a lot of positive news headlines, potentially with legalization around the United States. If that happens, then this could be the trade to be in.
Free Chart