CRON
CRON tradeCron break of 9.90 (and then 10.08) breaks the lower highs on the hourly and 4 hour and will look up towards a lower high on the daily/weekly - probably looks the best on the 3D chart but I'd be looking up towards the daily MBB and another 4 hour resistance. Profit target over 10%, risk under 3%
NBEV ready to drop! - DivergenceNBEV was caught up in the Cannabis hype and is another overvalued stock. Trend diverge with oscillator, and I believe the entire Cannabis market is under pressure. I definitely think it could bounce another time, but I see it going down sharply.
CRON the clear lead bear in the sectorCRON is the clear lead bear of the major names in the sector, not even trying for a bear flag of consolidation, preferring instead to continue a slow bleed down. We will eventually see a bounce, anything under 11.99 will be a lower high and I would not be surprised if the bulls were not even able to penetrate the middle bollinger band.
Since losing the RSI support line October 3rd we've seen a backtest of previous support, now resistance, and continuation down to lower lows.
Key daily range: 9.94 - 11.99
Zooming into the 4hr shows just how weak CRON is. While other weak names such as APH and TGOD are seeing some sideways consolidation before another leg down, Cronos Group isn't even trying for the equilibrium, instead breaking down to lower highs and lower lows.
Be aware there is market correlation between the mj sector with the S&P500, and keep in mind that SPY lost the daily uptrend today. It's often said that high tides raise all boats; likewise, low tides can beach all ships. A great example of that today was a losing trade I made shorting CRON. Let's look at the 5 minute chart below:
CRON is represented in the candles and SPY is represented underneath with the bars. You can see the correlation all morning, with a move down, a sideways consolidation bear flag, and a continued move down. The correlation breaks around 1pm and I notice CRON consolidating sideways in a bearish ascending wedge pattern, with multiple tops at 10.15 SPY on the other hand continued down. I placed a pretty large short and was filled at 10.14, with a stop loss at 10.16. I liked this setup because we had cooled off RSI levels, we had a clear resistance level with numerous rejections, and it was the weakest name in the sector on a day when the S&P500 lost the daily uptrend and was dumping - it was the perfect storm to profit significantly on another leg down. At 2:20pm SPY hit the low of the day and started an hourly oversold bounce that ultimately led to a bull break that stopped me out of my short for a decent sized loss, due to slippage. This is one instance where the setup and the plan were absolutely perfect, - except I forgot to check the correlation. SPY hourly RSI had briefly touched 16 and bounced, stopping me out for a loss.
By the way, I do analysis on the entire sector across all the mj charts I publish. If you're not looking at all the names I talk about, you're not getting the full sector-wide analysis. Follow me to get updates when I publish ideas and pay attention to the mj names you typically don't look at too, so you can stay in the know and get the full picture.
IGC overvalued, SHORT IGC is another cannabis stock that soared way too fast based on no tangible numbers. The Cannabis market will be a big market for sure. But the energy beverage sector is extremely competitive; we would have to see how the "Nitro G" can compete before the stock soars 1000% in a couple days. This is definitely the pumping phase, and it will come down.
DTEA, Nice HIgh Risk High Reward GambleGoes completely against my rules, but with the way this sector is moving, and considering how much money people have made off IGC and NBEV, this thing has a high chance of following through tomorrow.
Also, this stock only has 7 million in the float. Also, a big seller cashed out!!!!!!!! I haven't had time to check warrants, but judging from the price last year, I'm guessing they are not going to be lower than the current price.
THIS IS A GAMBLE, BUT A GOOD ONE
DO NOT BET THE RANCH, BUT DON'T SELL YOURSELF SHORT EITHER
GOOD LUCK
CRON gap-up & profit taking ruin a great chart setupCRON was the one setup I was most looking forward to this morning with it's multiple daily inside bars and triple bottom in the $10.80s range. That setup was ruined with a higher open, and profit taking all day. While the daily candle is very bearish, CRON did hold key support and broke the hourly lower high pattern. To fully shift momentum back to their favour, the bulls must hold low of day 11.05 and break high of day 11.99 (call it 12.00 even). That would confirm an hourly uptrend, but I would still anticipate a daily lower high somewhere around $12.75 at best. The hourly MACD bull move is very week and keeping me skeptical of any ability for significant followthrough, and the daily MACD extended even further down today despite the higher trading range compared Friday.
Keep an eye on CGC here - the sector leader if very close to a significant daily bear break and the correlation to the sector leader will favour the CRON bears.
Key range to watch is 10.82 - 14.00.
THE WEEK AHEAD: PEP, COST EARNINGS; EWZ, CRON, NIO, IQ, MJPEP announces earnings on Tuesday before market open; COST, on Thursday, after. Neither presents a particularly compelling earnings announcement-related volatility contraction play, with PEP's rank/30-day implied coming in at 30/18, and COST's at 35/23.
With Brazilian elections taking place a week from today (October 7th), it seems to me that an EWZ play is in order if you haven't already got something on: the November 16th 29/39 short strangle is paying 1.59 at the mid with break evens around one standard deevy -- 27.41/40.59. You can naturally go with an October setup, but implied was over 20% higher out in November (44.0% versus 53.2%) as of Friday close, so you're likely to get a little more juice if you go a touch farther out in time.
On the exchange-traded fund side of things, EWZ comes in at the top of the board, with a rank/30-day implied at 79/50, followed by USO at 65/28, and GDX at 50/27.
Non-earnings high implied: CRON: 71/124; NIO: ~/106; MJ: ~/68.0, and IQ: -/61.4.*
Broad Market Majors Background 30-Day: QQQ: 17.2%; IWM: 15.0%; DIA: 13.6%; EFA: 13.3%; SPY: 11.8%.
* -- Neither NIO, MJ, nor IQ have been around for 52-weeks, so they don't currently have a 52-week range to evaluate. I would note that the options liquidity for MJ isn't the greatest, but figured I would throw it in there since weed is hot, and not everyone enjoys paying the single name roller coaster. The MJ November 16th 40 short straddle is paying a whopping 7.45 at the mid, with break evens at 32.55 and 47.45 ... .
CRON tight range likely to break on MondayCRON formed its second daily inside bar on Friday as the range tightens up and the volume drops off. I'm looking for a break of range and a volume spike on Monday. I like inside bars because they signal equilibrium (pennant) patterns on a lower timeframe. Sure enough if you zoom into the hourly chart you can see a beautiful equilibrium playing out within our daily multiple inside bars.
Having pulled back 30% from all time high over the past seven trading days I'm anticipating a bull break as more likely that not, but correlation to sector leader Canopy Growth and the overall market will be worth keeping an eye on.
The range I'm watching is the low of Friday and the high of Friday, 10.86 - 11.40. Key daily support is 10.82, so any attempts to make an early entry by bottomfishing this range should have a stop loss just below that level.
On a bull break I would expect CRON to top out around $12.50-13.00 and then look for a tightening range on the daily chart. On a bear break we're looking down another 14% before our next support at 9.26.
For anybody playing CRON on the Canadian ticker, the setup is a little different. The range to break is 14.11 - 14.77. Key daily support is 14.05 so your stop should be just under that. On a bull break I would expect to top out around 16.00 and on a bear break we're looking down to test $12.05 support.
LONG on CRON - Parallel Channel and Falling WedgeI just took my gains on the short idea that I published on CRON -2.79% a couple days ago. Right now I believe the stock can bounce on the channel and price shows a falling wedge pattern. MACD is crossing as well and shows sign of a bullish opportunity.
I believe that the general sentiment on pot stocks is still fairly positive. However, there is a lot of speculation around it and I believe most pot stocks are way overvalued
Short on CRON - Divergence Technicals - CRON 9.78% broke out of a strong resistance today but failed to hold. Price is back within the parallel channel . In addition, RSI is diverging from price action. These are really simple, but strong bearish signals.
Fundamentals - Following the success of Tilray 38.12% , CRON 9.78% soared two days in a row, breaking new highs. However, no significant fundamental news within the company justifies such a jump in prices. I believe that the 560% change in price in 52 weeks is clearly an overreaction and could lead to a massive dump. Institutional investors are massively short on Cannabis stocks in general; CRON 9.78% is overpriced and will drop back down to the $9.13-10 level.
CRON - letting the dust settleCRON was all bulls today out of the gate setting a new all time high before pulling back hard. I'm watching the CRON range expecting a daily equilibrium from low of the oversold bounce to high of today. It's notable CRON is the only name that hasn't lost it's 4hr uptrend.
I'll be remaining very patient as the next couple of days set a tightening range with new levels to play off of. The break of that tightening pattern will set momentum for the days to follow. The 4hr chart currently looks bear-flaggy with extended hours on, although the big lower wicks are a point aginst that possibility. Breaking the low of today would confirm the bear flag.
Today's bear volume was very notable. We know there is ETF balancing ongoing this week that must settle up Friday, so I am leaning towards seeing more selling pressure into tomorrow and Friday.
I find the most clarity on the 4hr and daily charts.
About to get stoned...Shares of TLRY, and many other pot stocks for that matter, have been on fire lately. While I've made good money along the ride, its just getting ridiculous at this point.
This company went public exactly 2 months ago today.. the IPO price was $17. In 8 weeks time, it's up over 1300%! That's incredible for those that got in early, but its a clear sign of ignorance to be chasing it up here now. If you aren't taking at least some profits, you're either greedy or mentally ill.
While I think there's a lot of growth potential in the weed space, as evidenced by companies like STZ and KO getting invested, people need to be patient and let the prices come back down to earth.
I'm actually shorting this thing via long put options (the options are pricey, too!). Specifically, I bought Sept. 28 $55's in one account, and longer dated October $120's in another. Yes, it's ballsy move, but this blowout volume today may be a capitulation point.
Take a step back and smoke a blunt or 6 while you wait for this thing's buzz to wear off! And please don't be an idiot and chase this thing up here!
Cron high on WeedOur stock pick for today will be Cronos. Looks like a decent buy considering the hype around pot stocks.
As the dates gets closer to the Canadian Marijuana legalization(expected Oct 17), positive sentiments may drive this stock up. With alot potential growth and a rumours on Coke + Marijuana(Wild Dreams) this stock is one to watch.
Another counter from the same sector that interest us is Aurora Cannabis. Looks bright long term but high risk due to high speculation.
On a TA point. rebounded above $8 and looks like a potential break out. We will not put all our eggs on this but to diverse a small portion for big growth.
About to Break Resistance, Same Industry Group As CBDSWeed stock are on a roll right now. CANN and CBDS have always followed each other. Big volume spike, and with TLRY and all the big names in the marijuana sector on fire, speculative fervor will transition into the smaller names. For the most part, though, I like this as a sympathy play off today's CBDS move
Tilray most likely to hit ~$174aicody.com
Company Summary
Tilray, Inc. (NASDAQ: TLRY) is a global pioneer in the research, cultivation, production and distribution of cannabis and cannabinoids currently serving tens of thousands of patients in ten countries spanning five continents. Tilray has reported financial results for second quarter of 2018 and six months ended June 30, 2018.
“We are very pleased with our strong start to 2018. Tilray is well-positioned to continue to pioneer the development of the global medical cannabis market and to become a leader in the adult-use cannabis market in Canada,” said Mr. Brendan Kennedy, President and Chief Executive Officer of Tilray. “In the second quarter, we generated significant revenue growth as a result of our global strategy, our multinational distribution network and our commitment to research, innovation, quality and operational excellence.
Second Quarter 2018 Financial Highlights
Revenue increased to $9.7 (C$12.7) million, up 95.2% compared to the second quarter of last year. The increase in revenue was driven by increased patient demand in Canada, sales to other Licensed Producers and international sales.
Total kilogram equivalents sold increased 745 kilograms to 1,514 kilograms, or 97%, compared to the prior year.
Average net selling price per gram increased from $6.20 to $6.38 (C$8.12 to C$8.36) for the three months ended June 30, 2017 and 2018, respectively. The increase was primarily due to growth in higher potency product and extract sales, partially offset by an increase in wholesale revenues.
Net loss for the quarter was $12.8 million compared to $2.4 million for the second quarter of 2017. Net loss includes non-cash stock compensation charges of $5.6 million compared to a $35 thousand charged in the prior year period. Adjusted EBITDA was a loss of $4.7 million compared to a loss of $1.9 million the second quarter last year. The increased net loss and Adjusted EBITDA decline was primarily due to the increase in operating expenses related to continued growth, expansion of international teams, and costs related to financing and the initial public offering (“IPO”).
Business Highlights in 2018 to date:
Successfully completed IPO in July whereby 10.350 million shares of Class 2 Common Stock were sold at an initial price to the public of $17.00 per share. The Company received net proceeds of $163.6 (C$216.9) million after the underwriting discount. Net proceeds will be used to fund the build out of cultivation and processing capacity, repay outstanding principal and interest under the Privateer Holdings debt facilities, and for future acquisitions and working capital.
Prior to the IPO, completed Series A funding of $55.0 (C$69.2) million from leading institutional investors.
Signed agreements to supply cannabis to adult-use consumers in seven Canadian provinces and territories (British Columbia, Manitoba, Nova Scotia, Ontario, Quebec, the Yukon territory and the Northwest Territories).
Entered into a strategic agreement with Sandoz Canada, a division of Novartis, to collaborate on the creation and sale of co-branded and co-developed non-combustible medical cannabis products.
Signed agreement with Shoppers Drug Mart Inc., Canada’s largest pharmacy chain with more than 1,200 pharmacies and expect to supply Tilray products following approval of Shoppers’ application to become a Licensed Producer.
Signed binding letter of intent with Pharmasave, one of Canada’s leading independent pharmacy chains with more than 650 pharmacies, which Tilray anticipates will allow it to supply Pharmasave stores with Tilray products contingent upon a change in laws that permits Canadian pharmacies to distribute medical cannabis to patients.
Completed exports to Argentina, South Africa and the United Kingdom, making Tilray products available in 11 countries on five continents.
Launched High Park Holdings Ltd., Tilray’s wholly owned subsidiary formed to serve the pending adult-use market in Canada with a broad-based portfolio of cannabis brands and products.
Announced the launch of the CANACA™ brand, a new cannabis brand celebrating Canadian roots, values and this historical moment in Canada as the country becomes the world’s first G7 nation to federally legalize cannabis through adult-use legalization.
Announced clinical study results of Tilray® 2:100 product showed promise in Canada’s first pediatric study of mixed THC/CBD medical cannabis oil for children with drug-resistant epilepsy.
Statistics
Shares Outstanding: 76.5M
Avg Daily Vol: 8.5M
Market Cap: 14.08B
52-Week High: $151.18
52-Week Low: $20.10
Forward PE: NA
Annual Div/Dividend Yield: $0.00 / 0.00%
Annual Rev: 23.1M
Inst Own: 0.0%
1-Month Return: NA
3-Month Return: NA
Next Earnings Report Date: 08/29/2018
Earnings ESP: -0.18
Revenue Per Employee: $85,912
Money Flow Ratio: 1.08%
Profitability
Revenue Growth: 62.5% (Sector Average 3.3%)
Gross Margin: 53.0% (Sector Average 62.4%)
Return on Equity: NA (Sector Average -19.2%)
Net Margin: -52.9% (Sector Average -10.4%)
Debt
Current Ratio: 1.1 (Sector Average 2.9)
Debt-to-Capital: 230.5% (Sector Average 25.8%)
Interest Funding: -12.5% (Sector Average 0.3%)
Interest Coverage: -11.6 (Sector Average -4.7)
Dividend
Dividend Growth: NA (Sector Average 5.5%)
Dividend Payout: NA (Sector Average 66.7%)
Dividend Coverage: NA (Sector Average 2.1)
Dividend Yield: NA (Sector Average 0.00%)
Top Peer Companies
Akcea Therapeutics Inc (AKCA)
Akorn Inc (AKRX)
American Cannabis Company Inc (OTCMKTS: AMMJ)
Amphastar Pharmaceuticals Inc (AMPH)
Aphira Inc (TSE: APH)
Aurora Cannabis Inc (TSE: ACB)
Cambrex Corp (CBM)
CannaRoyalty Corp (CNSX: CRZ)
Canopy Growth Corp (CGC)
Corcept Therapeutics Inc (CORT)
Cronos Group Inc (CRON)
Emergent BioSolutions Inc (EBS)
Hydropothecary Corp (TSE: HEXO)
Innoviva Inc (INVA)
Maricann Group Inc (CNSX: MARI)
Medmen Enterprises Inc (CNSX: MMEN)
MedReleaf Corp (MEDFF)
OPKO Health Inc (OPK)
Pacira Pharmaceuticals Inc (PCRX)
Theravance Biopharma Inc (TBPH)
VIVO Cannabis Inc (ABCCF)
12 Month Price Target
Mean: USD$115.05
High: USD$174.33
Low: USD$90.32
Revenue Growth
Revenue increased to $9.7 (C$12.7) million, up 95.2% compared to the second quarter of last year. The increase in revenue was driven by increased patient demand in Canada, sales to other Licensed Producers and international sales.
Earnings Surprise
Positive (+18.4%)
CRON bounce was by far the weakest of the major sector namesCRON low of Friday was just below the .5 retracement from low of consolidation to all time high 13.39. It had the weakest bounce Friday out of the big four, rejecting hard from the .382 dump retracement whereas other names hit the .5 or in the case of APH hit the .618. Watching the hourly chart for a break of it's tightening range to indicate short term momentum for this week, and helping to define levels for the daily tightening pattern on a macro level
OPENING: CRON OCT 19TH 10 MONIED COVERED CALL... for a 9.26/contract debit.
Max Profit: $74/contract
Max Loss: $926/contract
Break Even/Cost Basis: 9.26/share
Theta: 1.67
Delta: 23.56
Notes: Going directly to a monied covered call in this high implied volatility underlying (121%) with a mildly bullish delta metric. Now that I look at it, the 10 short put (25.78 delta) in October has a better max (1.03) with similar delta metrics should you want to go that route.
THE WEEK AHEAD: ORCL, KR EARNINGS: EWZ, TSLA, CRONEarnings:
ORCL: Announces Thursday after market. Rank/IV: 74/31. Sept 21st 68% Probability of Profit 20 delta 45/50.5 short strangle: .79 credit.
KR: Announces Thursday before market. Rank/IV: 54/37. Sept 21st 72% Probability of Profit 20 delta 30/35 short strangles: .60 credit.
Non-Earnings:
EWZ: Rank/IV: 97/48
TSLA: Rank/IV: 95/57
GDX: Rank/IV: 68/30
USO: Rank/IV: 62/26
FXE: Rank/IV: 53/8
Others of Note:
CRON: Background IV at 138% on volume of 24.1 million shares. Oct 19th 70% Probability of Profit 9/19 short strangle: 1.30 credit.
See also (for other cannabis-related underlyings):
TLRY: Background IV at 135% on volume of 9.02 million shares.
CGC: Background IV at 98.5% on volume of 13.1 million shares.
Head And Shoulders Pattern, Trend ReversingWent up 1700% after reverse split. Broke support yesterday on increased volume. Had my eye on this one for awhile.
