Weeds plays continue to be on fire in the current market, and with so much growth and momentum behind the legalized marijuana market driving price action, it's hard not to chase, which is Rule #2 in trading. Be wary of chasing a stock that is already up. 

For a OTC stock like EMHTF, while the Williams %R indicator shows this stock is not anywhere near overbought, the charts are beginning to look overextended, begging the question, how high will they fly before buyers of this asset become exhausted and selling pressure is felt leading to a price reversal. 

About Yesterday:

Yesterday's market rewarded those traders who were LONG EMHTF intraday yesterday and those who are holding an overnight position before the market open today, where there will be an expected gap up.  Yesterday was a green candle with EMHTF stock closing at $6.88, higher than it's open at 6.27 

Volume in yesterday's session stacked up with a high volume bar earlier this month on Jan 3rd with 2.2 million shares being traded that day.  Jan 3rd was a green candle day, the stock closed 81 cents higher than it open. There was money to be made.

EMHTF stock has had 4 green candles in the last 4 trading session, however this green streak is preceded by 6 red candles with low volume, another reason to be wary with position size going into today's trading session. Do not SHORT this stock, the trend is your friend and the overall market is rewarding weed plays right now.  The trend is a multi-month trend in the making. 

What the price action reveals right now:  The stock has broken through a critical resistance level of $6.40 and bounced nicely off support at $4.20, so it's running and rewarding investor confidence.

Positive developments About the Company's growth:

A facility is being built in British Columbia, Canada to increase its production facilities and to better position itself as a leader in the cannabis space, and stock options have been issued to those who work for this small-cap through an ESPP, employee stock purchase plan.

 

My recommendation is to SELL into a morning spike If you are already LONG and take handsome profits.

If you are not LONG, don't buy now, and learn the good habit of never chasing.

While it's painful to watch from the sidelines as these plays continue to surge, good habits will solidify odds for long term success moving forward.