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.
