The Bottom Line:
- Charting Man Dan, with over 13 years of experience in cannabis stock trading, provides a sector update highlighting the current bearish market conditions.
- He outlines three key factors that could potentially draw him back into the cannabis sector: confirmed trend changes, significant headlines, or specific timeframes and events like the Florida vote and Schedule 3 finalization.
- The discussion includes an analysis of weekly rising wedge patterns and the importance of levels like 730 and 787 for determining future market direction.
- Bears are currently in control, but Dan emphasizes the need for a substantial bounce and higher highs to shift towards a bullish daily uptrend.
- He compares the volatility and strength of various cannabis stocks and tiers, noting significant support and resistance levels to watch in the upcoming weeks.
Current Bearish Conditions in the Cannabis Stock Market
Overview of Current Market Conditions in Cannabis Stocks
hey everyone I’m charting Man Dan I’ve been trading cannabis stocks for the last 13 years and seven months we’re going to check in on the sector it’s certainly been despair out there with price action leading to lower lows we’re going to talk about where we’re headed what we’re looking for in June key levels from here and again repeating my expectations and my game plan for the rest of the year so a couple weeks ago I went back to all cash in the sector I did make another attempt to reestablish a position in msos and that stopped out I’ll go over that in a little bit more more detail in just a moment so what I care about there’s only three things that are going to get me into the sector number one Bulls confirming Trend changes back in their favor and showing some nice price action with things clearly shifting number two a surprise headline somebody gets bought out or something along those lines which quickly shift sentiment in the sector or number three time heading to August September and knowing that for me I think another potential catalyst is towards the finalization of schedule 3 but also the Florida vote and of course the potential talking points what what we really want to see is what we’ve seen happen in crypto over very quickly the last two weeks so there’s a 25% chance that eth would see an ETF approved for an ethereum and then you have Trump coming out and say hey I’ll accept crypto donations I’m the crypto candidate I support crypto businesses I support Bitcoin and your freedom of choice and instantly Biden and this Administration who have been cracking down on crypto and essentially you know even talking about an anti-crypto unit are doing a complete 180 as quickly as they can and within days we now have an approved eth ETF and they’re trying to say no we like crypto too we’ll take donations too and so now it’s a they’re battling over this talking point as to who’s going to claim it and who’s going to be the better candidate on this issue and right now we we have Biden and you know clearly they’re jumping on cannabis as one of their issues Trump hasn’t said anything about it we want to see them battle over this issue and say no that’s mine I’m going to say the more positive things and get that vote and so it’s happening in crypto way out of left field and it’s not happening in cannabis so that is something that Bulls want to see so all right let’s talk about the weekly Rising wedge so we started looking at this weekly Rising wedge two months ago and I did not think it was the most likely scenario but as soon as we saw the reaction to the the headline then it was oh that is probably a rising wedge again the rising wedge is when you break resistance straight into a pullback break resistance straight into a pullback break resistance straight into a pullback because that shows the Bulls are tiring there’s no follow through and so now we have the support breaking and we’re looking down at 730 as the level from here there is a gap to fill on The Daily so there’s a level at 787 but 787 and 730 are the next two levels that we’re looking at and as far as the monthly remember how long it took to gain the monthly uptrend couple month bounce couple month pullback sideways it took like six months to confirm that uptrend the the 730 level is our last monthly higher low so we could say we are in a monthly uptrend as long as 730 holds if we lose that level we are no longer in a monthly uptrend we are let’s see the daily time frame has a lot of space for a lower high to form as the result to the next bounce we got an hourly downtrend as our guide so we had a lower high at 853 on Friday another little lower high at 827 and when we get a bounce going again we can bounce 10% plus and just look for a daily lower high to be the result of that bounce so if things are going to change I need a big bounce a higher low and a higher high back in an uptrend and then I’ll say hey we’re in a daily uptrend that’s a shift but for now the Bears are in full short-term control and the Bulls have not really been anywhere in sight since we spiked up here and that was when I sold a chunk of msos at 30 that was the Second Chance move again here’s your huge headline reaction there’s your huge red flag there’s a little shortterm second chance here but this was the real Second Chance uh in terms of both Longs looking to size down and shorts looking to reload or grab a position so again it’s it’s lack of of liquidity it is extremely easy to to take out the bid because there’s no bid support and again summer on the OTC volume is notoriously low notoriously low should have gotten a chart but I’ve seen charts in the past back in my penny stock trading days where it’s like the dollar volume on the OTC from May through August is a fraction of what it is in other months so bears in full control tcnnf is still holding its tightening range right now we’re going to battle 10402 support to start this coming week so again it’s we’re within the candle of the headline day higher low so breakout higher low lower high trying the higher low after 1042 it’s $10 and again losing what I want to look at a chart and say what like something has changed so I was saying I like tcnnf long as long as weekly ema2 is support held it held it just barely held it held it again we have finally lost it closed below it this is the first time we’ve closed below that this year that stands out as this is something different than what we’ve seen all year the Bears want to take out $10 to more convincingly take control but tcnnf is still holding on better than the other tier ones and you can see to end this week we had the we reached the strongest it’s ever been compared to msos and that’s because the other tier ones are a bit weaker I do expect this relative strength to continue as long as the Florida vote is still in the not the rear viw miror the out the windshield in front of us so I don’t care about polls until later summer then I think it’s going to start being meaningful as far as impacting price just imagine it this way if if the poll gives you know percentage at at 60% that means it’s a you know 5050 as to whether we pass or not so it’ll be 50% priced in we can say that uh it’s it’s passive if the polls are showing 55% then we can say it’s it’s being priced in that it’s not going to pass if it’s 70% it’s being priced in that it’s going to pass but because it’s going to be a close call down to the wire probably um the Market’s not going to be able to accurately price it in an advance and so I do expect a decent bit of volatility as we get real close to the actual vote taking place ggb if clear bear break to end the week and again just 1088 is the only support here near nearby and we have a lot of names that are testing the low of the year so 1088 is key again a lot of space there is a little level here resistance so I’ll say 1280 is a little lower high so anything above 1280 I should say anything under 1280 just a lower high again 10% bounce still just a daily lower high you’ve got uh cure relief also showing weakness we trading view is real slow for me right now I need to reboot it but Kier Leaf is knocking on the door of of 2024 lows the tier 2 names vrnf this was a long drawn out equilibrium higher low lower high higher low double top bear break and we did hit the lowest level in 2024 to end this week a ywf is on the verge of 210 breaks it’s the lowest level not of the year but lowest level in months so there’s not a lot in the short term that Bulls are excited about a ywf yeah 210 is the most important uh short-term support for me so again it’s you know it is Bleak out there you can see the social media sentiment and the sentiment is one thing the price action is another thing and obviously the price action is weak but if it’s going to be a capitulation kind of sentiment period here that’s when you get to historical oversold RSI level so again we’re not close to a a capitulation kind of move in my opinion just yet if we see you know if we drop another 8% next week we’ll be approaching some short-term capitulation Canadian side so cgc still tightening up Bulls really want to hold 876 so lower high trying for this higher low looks like earnings are coming up we’ll have to double check that date because trading view often gets those wrong but bulls have to show up to start this week and make our way back up over $10 if we’re going to keep this equilibrium going but it’s looking better than tier one MSO msos right now just because we are holding the low of May and you know cure Lea low of May was up here 520 we’re already 10% under that level ACB same deal trying for the higher low compared to 628 we held it by four pennies Bulls needed a move to start the week here earnings next week it looks like and and anything under 814 would be a lower high but it’s looking like for both cgc and ACB earnings could potentially dictate how we break this sideways range a lot of the US sideways ranges are breaking bare these sideways ranges have not broken yet Kon potential Head and Shoulders here so if we bounce holding 254 we look for the lower high compared to the top and then it will see if we get that head and shoulders confirmed and that’s similar tcnnf had something similar shaping up so if tcnnf breaks 1042 and $10 it’s essentially left
Key Factors That Could Revive Interest in the Cannabis Sector
Potential Catalysts for Market Revival in the Cannabis Sector
A shift in market sentiment, such as Bulls confirming trend changes, unexpected positive headlines like mergers, or regulatory developments could revive interest in the sector.
Key Levels and Trends to Monitor
Current market conditions suggest a bearish control with specific technical levels like support at 730 and 787 to observe. Maintaining the monthly uptrend at 730 is crucial for a positive outlook.
Implications of Political Developments
Political factors, particularly related to potential policy changes and government stances, could significantly impact market dynamics. Observing how political figures address cannabis issues may provide clues for future market trends.
Weekly Rising Wedge Patterns and Crucial Levels to Watch
Rising Wedge Patterns and Market Levels to Monitor
Discussion on the formation of a weekly rising wedge pattern in the cannabis sector, with key levels such as 730 and 787 being crucial for market direction.
Potential Market Catalysts and Political Impact
Exploration of potential market catalysts for reviving interest in the cannabis sector, including shifts in sentiment, unexpected positive developments, and the influence of political factors on market dynamics.
Significance of a Substantial Bounce for a Bullish Shift
Importance of a Significant Rebound for a Bullish Transition
A significant rebound in the cannabis sector is essential for signaling a potential shift in market sentiment. This could be triggered by Bulls confirming trend changes, unexpected positive headlines like mergers, or regulatory developments that favor the sector.
Crucial Levels and Market Trends to Monitor
Monitoring key technical levels such as support at 730 and resistance at 787 will be critical in assessing the market direction. Maintaining the monthly uptrend above 730 is imperative for sustaining a positive market outlook.
Impact of Political Developments on Market Dynamics
Political factors, particularly those related to policy changes and government positions on cannabis issues, can significantly influence market trends. Observing how political figures address cannabis-related matters may provide valuable insights into future market movements.
Comparative Analysis of Volatility and Strength Across Cannabis Stocks
Comparative Analysis of Volatility and Strength Across Cannabis Stocks
In assessing the cannabis stocks sector, volatility and strength play pivotal roles. Understanding the market conditions and trends across different cannabis stocks is essential for making informed trading decisions. Factors such as historical price action, support levels, and potential catalysts can provide valuable insights into the future prospects of various stocks within the sector.
Trends in Market Sentiment and Potential Impact
Analyzing the current sentiment within the market and how it may be influenced by external factors like political developments or regulatory changes can help traders anticipate potential shifts in stock prices. Monitoring key levels and technical patterns can aid in gauging the overall investor sentiment towards cannabis stocks.
Implications of Technical Patterns on Trading Strategies
Examining technical patterns like rising wedge formations and their impact on market dynamics can assist traders in formulating effective trading strategies. By understanding how these patterns affect price movements and trend reversals, investors can better position themselves to capitalize on opportunities and mitigate risks in the cannabis stocks market.
