D&D Note (1.25.2018) ~ Recreational Pot Gets Smoked ~

D&D Note (1.25.2018) ~ Recreational Pot Gets Smoked ~

It’s the wild west when it comes to cannabis. And today recreational pot stocks got smoked. News of Lakewood hedge fund shorting both Canopy and Aurora put downward pressure on the entire basket of pot stocks. There main point is that it would only take $150m to replicate their growing facilitates.

Aphria has also seen downward pressure on their release that costs for dried cannabis per gram has temporarily increased from [CA]$1.61 to [CA]$2.13.

These reasons are why D&D is diversifying with both recreational cannabis stocks and pharmaceutical cannabis stocks. July is when Canada goes fully recreational so there should still be a few months of runway despite the recent pullback. However, the longterm upside we still see as the cannapharma companies who are working on curing diseases not just helping people get high.

Highlighting APHQF and TWMJF we’ve seen both stocks filling the recent gap in both charts. Today we saw a breakdown of key levels pointing to possible more short term downside. For this technical reason D&D sat out todays trading session and will look to see if technical levels can hold tomorrow before adding to positions.

We are more in favor of adding to APHQF as it was not disclosed that it was being shorted by Lakewood and the company is the largest low cost outdoor producer which is difficult to replicate on their scale. TWMJF could be in for more pain due to the short position.

If we see further pressure on the cannapharma stocks getting caught in the downslide we will look to add to our positions in CNTTF, EMHTF, and IMLFF.

Technical Level Charts

TWMJF

– Today broke $26

– Today resistance $25.11

– Today closed at $25.67

– Tomorrow needs to hold $24.50

– Tomorrow need to close above $26 for buy signal

APHQF

– Today broke $15.55

– Today resistance $15.26

– Today closed at $15.47

– Tomorrow needs to hold $14.50

– Tomorrow need to close above $15.55 for buy signal

D&D movers:

– NFLX up 3.21%

– BA up 2.52%

– AMZN up 1.51%

– TWMJF down -9.38%

– APHQF down -7.97%

– IMLFF down -4.87%

Indexes

– DOW up 0.53%

– NASDAQ down -0.05%

– S&P up 0.06%

Sector Movers:

– Utilities up 1.53%

– Health up 0.89%

– Materials up 0.71%

– Energy down -0.77%

– Technology down -0.24%

– Financials down -0.19%

Notes

– US 2-YR 2.092% (up 0.008)

– US 10-YR 2.624% (down -0.03)

– US 30-YR 2.891% (down -0.046)

Volatility

– VIX 11.58 (up 0.96%)

Crypto (1:00 PST)

– BTC $11,270.25

– ETH $1,064.64

– BCH $1,652.02

– LTC $179.94

Metals

– Gold $1,346.10 (down -0.75%)

– Silver $17.275 (down -1.22%)

– Copper $3.204 (down -0.76%)

Energy

– Oil $65.25 (down -0.55%)

– Brent $70.10 (down -0.61%)

– Nat Gas $3.448 (down -1.74%)