CANNABIS ALERT: New Pot IPO Hits NASDAQ
Today, we’re taking a closer look at the market for pot stocks.
You already know in North America legal cannabis continues to be a massive, unstoppable trend.
The clock is ticking down to legal recreational weed in Canada for mid-October. As I write, pot is legal in some form or another in more U.S.
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states than ever before.
At the same time, there have been major developments at a federal level here in the U.S. that bring us closer to seeing marijuana removed from the DEA’s Schedule I list.
And the companies involved in this space have massive growth opportunities ahead.
But the stock market is a different story.
Scaling Back the Charts for Real Perspective
Here’s how pot stocks have traded in the North American Index over the past six months:
Despite major progress in the legal pot movement and huge business growth at many companies with cannabis exposure, pot stocks are under pressure this year.
The obvious question is whether we should be concerned about what’s happening with pot stocks right now.
Is the lack of upward movement in the overall market a problem?
My answer is a resounding no!
To understand why, you need to zoom out on the North American Index and look at the long-term trend over the past three years:
You don’t need to be a trading whiz to figure out this second chart is showing an uptrend.
We’ve seen plenty of corrections along the way, but pot’s price action from early 2016 has clearly moved up and to the right in a well-defined rally.
Make no mistake — 2018’s weaker price action is a gift.
The pullback gives us a phenomenal opportunity to build on positions in these transformational stocks before the next surge in pot stock prices.
Speaking of which…
New Pot Stock Hits NASDAQ and Soars
(NASDAQ: TLRY) made history Thursday.
According to Marijuana Business Daily, it’s “the first cannabis business to go public on a major U.S. exchange via an initial public offering (IPO).”
Since it’s debut, Tilray has made early movers very happy up almost 77% as I write today.
The stock IPO’d at $17 and is trading today around $30.
Tilray is one of Canada’s largest cannabis companies.
It’s also one of a kind in the space right now.
The Marijuana Business Daily report notes, “Tilray is the first plant-touching business to go public on a major exchange.”
The question is… How do you play this?
Investors have proven they have an appetite for new stock listings.
Recently, the Wall Street Journal noted companies that have gone public this year are trading on an average of 22% above their IPO price.
The surge in Tilray’s share value clearly supports this.
But before you run off and buy shares, it’s important to remember IPOs are one of the trickier trades on the market.
It’s tempting to take a huge hack at them right when they begin trading, especially when you’re dealing with a hot name or market.
It’s important however to remain selective when picking new trades.
Unless you’re willing and able to trade in and out of an IPO, buying one before it gets a couple of moving averages under its belt probably isn’t always the best idea.
Once Tilray gets its legs underneath it the real trading can begin.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily
TOPICS | cannabis, Initial Public Offering, IPO, marijuana, Nasdaq, POT, stock, Tilray, TLRY