There are several reasons to like this low-priced pot stock.
It just yesterday it bounced off the 50-day moving average, and a prior breakout level. This support level also includes the biggest volume day in its history.
Plus, it rallied yesterday on news that it was acquiring another pot stock.
Here’s how to trade this for the potential to earn a quick 100% return.
Aurora Cannabis (ACB) has a textbook retracement that just turned higher yesterday.
A rally back up to the all-time highs looks very possible after its month-long correction.
A move from its current price of about $9 to its highs around $12 would be a nice 30% gain on this low-priced stock.
Plus, if you trade options, the June 10 or 11 calls could easily yield a 100% gain or more if even if ACB only moves over $11 in the next 30 days.
The retracement pattern defines a very good stop for this trade as under $8.30.
With that in mind, the best entry price would be under $9.10. This is because a target of $12 would be roughly 3x the trade’s risk with a stop under $8.30.
This entry level looks great for the potential for the quick pop that I’m describing, but it’s also a good entry for the trader looking to hold for a longer-term trade.
There is one additional factor that could make or break this trade. On May 7th ACB will announce earnings.
There’s no way to predict how big of a move in either direction this report may create. Make sure you are willing and able to handle earnings volatility if you hold a position through that report.
Rick Nartarian, Chief Investment Officer
The American Investor Daily