Markets were soft today and not a great way to start the week. Indices have broken their up trending channels and come down to support areas. SPX needs to hold the 2120 support area or it could drop quickly another 50 points or so. The trade de jour these days are cannabis stocks. It seems to be the hot sector with both candidates talking about legalization of marijuana (well with Trump, it hard's to say but it is unlikely he will win anyways). Mostly, the hot ones are junk stocks trading on the OTCQB or pink sheets; CANN, CBDS, CGC.TO, CGRW. I would be very careful going long as they all have had dramatic moves. For example, CGRW is trading with a $250 million market cap up 5x from last month. They can have very sharp reversals very quickly.
Longs:
EGLT: Stock made a huge reversal today and the chart shows a bullish engulfing candle on the daily chart. It traded down as low as $6.72, bouncing off of support, trading as high as $7.96 closing $7.83. I would look to go long this stock over $8.13 with a price target of $9.10. Shorts nearly 16 days to cover so it could add to the momentum and follow through from today.
EXAS: Stock has been consolidating over the last few months and today it was up strongly in a terrible market. It has resistance at $19.90 area. A move above that and we could see it go back to $22.25 and maybe $23.00. Shorts 9.7 days to cover.
HDSN: Trading right at the bottom of its up trending channel and at the peak of the down trending resistance line. The last two times it made this pattern it had very strong move to the upside when it broke above the resistance line. I would be looking to go long this stock (1/2 position) above $6.40. I would add to the position above $6.80. Price target $7.80.
NOVN: Recent IPO that had been in a falling wedge pattern. The last three days it has turned up and today it had a big move, up $1.56 trading as high as $21.00. I would look to go long over $21.00 with a price target of $22.00.
NVFY: Stock is in a strong up trending channel hitting a recent high of $4.20 and closing at $4.18. It has resistance at $5.10. I would look to go long above that price with a price target of $8.00. But be careful, it is up from $0.40 only 3 months ago.
Shorts:
FLO: Stock is forming a bear flag and hard to say when it will break down. I would either short it on a pop to $15.98 or a break below $14.50. Price target $12.00. Shorts 11.5 days to cover.
GIII: I shorted this stock late in the day at $28.18 from my watch list today. Stock closed today at $27.97 after hitting a low of $27.95. I would short into any pops or below $27.95. It is an ugly chart and this stock looks like it is about to accelerate to my price target of $22.00.
NHTC: Stock broke down sharply yesterday and today it had a negative inside day. I would look to go short below $22.00 with an add below $20.85. Price target is $16.50. Shorts 31 days to cover so be careful.
Nice
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