Canopy GrowthI believe the majority of cannabis investors are retail investors with low knowledge about the market and there company(s) of choice, with a hope of becoming rich fast and without pain. I see reports about cannabis investors that says investors are young people, and talks on yahoo about young investors in the cannabis space. I have followed the charts closely since mars 2018, when most retail hype started to come around, and people in my surrounding start to talk about cannabis. And for most part it, it looks the same, Big gains under some time and then selloff for some time after, and the sellers i believe are the buyers wanting to get rich fast, which is probably 90% of young investors mindset. The selling is under much lower volume then the buy up.
And with no new news on sale or progress in the US that indicates a higher valuation for the companies already high valuation compared to revenue and earnings, i can easy see "smart money" just waiting for price to slowly come down and then start to buy. I believe if the industry were to get a higher valuation the price will continue to climb higher and stabilize with smaller movements. Not continue to sway 10-15 % or more per week, for me that indicates a market without serious players, and more a environment where the big players sees a opportunity to make big money without risking not getting a good price for the stock, there is room and time to play the markets. But the time is counting down as the companies gets better sales figures, and really show its a viable business model. Given the fact the companies is losing millions on there operational side of business. And only time will tell what company will survive until breakeven. And the really big money will start pouring in..
If the volatility in the stocks get lower and trade in a tighter range, in a slow and steady climb, that indicates for me that the markets players is starting to buy up the stocks and is anticipating a higher valuation of the cannabis industry/company. And with growth slowing down on many sectors like tech and more, cannabis industry will become a good place for growth investors, looking for growth during a slower economy.
With all the negative news coming out on the cannabis sector, specially on the big player on over valuation or right out scams, when the real trouble in this young industry is to pick a company that will survive and flourish, its not that the cannabis industry not will create big winners. So, the impotence of getting in early is not that important and there is no early getting in now, the valuations is high for all companies until they produce much better numbers, most companies in the industry have valuations when they are running at 2019 full year capacity, and some with a premium, etc Canopy and Cronos, as people view them having a competitive edge with the investment of Constellations brands and Altair, where the cash injection they revived and partnership it gain it enables them for bigger and better business opportunities where they can make massive profits and it protects investors from the risk of the company running out of money, a premium investors are willing to pay in this new and high risk market. Where companies without partnerships have a higher risk to them of needing to issue new shares for capital or face bankruptcy. As so price is lower and the reward is higher.
When companies start to show strong signs of breakeven with strong revenue growth the price of the stock will skyrocket, as it shows investors with lower risk profile, where the most money is, will start to pour into the market and specific companies. Until then the market will continue to move money from the impatience investor to the patience investor.
So with that said:
Canopy growth are now trading in there ATH range, after a strong January, and nothing really new information beside a 60 Cad $ rek and the stock become cheap at a point, with heavy buy volume to follow, and the price increased almost 100 % from lows of late 2018. So if the price on Canopy is going to be higher i want to see a slow and steady climb from here to 70 ish. With a possible pullback to 60 range before continuation of the uptrend.
With many days of good gains and the market is still being played price will drop below 60, and buying will comeback at lower 50 range, where it can do two things, continue to trade in a range of start to trade higher.
Only for educational purposes.
