You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news.
Thank you for the ongoing support for Alan Brochstein during his recovery. We are grateful for the contributions that continue to come in for his medical GoFundMe campaign. While there isn’t a substantial update to give, we hope to provide one soon.
News of the broad market having its worst performance in 14 years this month certainly isn’t helping cannabis stocks. Exchange-traded fund AdvisorShares Pure US Cannabis (MSOS) retreated to new all-time lows of $15.15 on 4/28.
When reviewing the technical chart, the candlestick of that day closed as what chart technicians would call a hammer, which indicates that buyers stepped in. The proceeding candle on 4/29, which was month-end, closed at $15.35. Although the volume was higher on 4/28 than any other day in April, it didn’t look like capitulation took place. However, capitulation is not needed for a reversal to happen either.
While one might compare cannabis stocks against other small cap stocks such as those in the iShares Russell 2000 ETF (IWM), you could argue the SPDR S&P Biotech ETF (XBI), which covers a gambit of biotech stocks, could be better to use due to its more speculative nature. When looking at MSOS against XBI, the performance in April between the two is more similar than comparing MSOS with IWM.
Using MSOS inception date of 9/1/20 and plotting it against XBI, the overall performance between the two appears even closer.
While cannabis traders yearn for a surprise catalyst that would help the sector break away from its downtrend, long-term investors continue to observe business fundamental trends of the top and emerging companies, many of which report financials in May.
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New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:
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Alan & Joel