Dope stocks like CGC, ACB, and TLRY have been a disaster this year despite being super popular thanks to having been the hot sector to be in the past.
This hasn’t stopped people from trying to buy them for the next big rally or caused them to sell and give up. In fact Aurora Cannabis (NYSE: ACB) not only is the one stock owned by the most number of people with Robinhood accounts, but more people are in it now than were in it six weeks ago.
Robinhood is really popular, because it’s an easy app to trade with and you can get a free share of stock if you open up an account with them.
Here is a chart of ACB.
Over 545,000 people with Robinhood accounts own ACB. About two months ago that number was around 513,00 so the masses have been trying to guess the bottom as the stock has fallen over 50% since Labor Day.
They have been wrong so far, but can it bottom here?
There is no way to know for sure, but it’s trying to form support at $3.50. If it can get above $4.00 by the end of this month then it will be setup to rally into the end of the year.
TLRY and CGC have identical charts so the whole sector is in this position.
At some point there will be a rally and it may be playable so I’m watching this. If the dope stocks fall again we could see a December tax loss selling flush out to set the stage for a “January effect” bounce – but that will be something I’ll point out to you if the pattern plays out.
These dope stocks are only good for trading now, because they are below their 200-day moving averages. So you have to be willing to sell and take the gains if you successfully game a rally and have stop loss orders in case your play is wrong as the last thing you want to do is be a bagholder in a broken stock with heavy insider selling.
Bigger more sustainable easier moves that least months instead of days are coming frankly in small cap mining stocks now than in dope stocks. That’s why I made an emerging silver company my top stock pick for November. I did a video on it yesterday (and what is happening in gold and silver in general) you can find here: