The stock charts in the marijuana industry are heating up again.
Yesterday, many of them had strong bullish days while the market was generally weak.
Here are two stocks poised for big moves that may have started yesterday
Both of these trades represent a pull back and consolidation near a major moving average.
However, they are in very different trends.
The first set up is Tilray (TLRY). This stock is in a bearish trend, but has been basing for 3 months.
The last 5 days is the first time this stock has closed over its 50-day moving average for that many consecutive days since it broke below it in October 2018.
Additionally, its initial break of the 50-day average on 2/20 was on good volume, and the subsequent days have stayed above that breakout day’s low.
The trade setup is to buy a breakout over $81 with a stop under $76.50.
This is a very volatile stock which could quickly rally to $100, but you need to be very careful and disciplined with your stops.
The second stock is Aurora Cannabis (ACB).
ACB has trended higher since its low in December. Over the last few weeks, it has retraced and consolidated at its 200-day moving average.
Yesterday it broke out of its consolidation.
The stop for this breakout trade is $6.60. The entry could be anywhere between $7.30 and $7.70. It should not trade below $7.30 so if it does, I’d wait to see if it holds that support.
Any entry should consider how much you want to risk with a stop under $6.60. I suggested $7.70 as the top of the range, because if it pulls back from its 2/26 close the $7.70 level is the top of support that could hold it up.
Rick Nartarian, Chief Investment Officer
Darwin Wealth Creation