Dope stocks have been a disaster this year and yesterday ACB fell over 7% on big volume in one day. There is a trend every year where the sector that does the worst going into December tends to see heavy tax loss selling in the final weeks of the year.
That often sets the stage for a nice rally in January once that selling is done, but so many have tried to defy this trend with dope stocks that they are positioned now to help create a brutal selling climax.
Take a look at ACB.
ACB as you can see dumped over 7% yesterday and is now set to test its November low. I can’t tell you how many times this year I have gotten emails from people telling me that dope stocks have bottomed. It happened several times in August and November when the stock bounced, but the latest bounce has already failed.
Hopefully it holds support. I don’t know if it will though. What I do know is that many have been holding it in hopes of a rally and are likely to give up.
I say this because more individual investors own ACB than any other stock that have Robinhood accounts as it remains the stock that more people own on there than any other. Here is the list of the top six most owned stocks.
Over 577,000 people on Robinhood own ACB.
That’s enough people with losses on it to setup a selling climax.
Selling climaxes do lead to rallies when they complete, but they are brutal when they happen.
We must keep our eyes on the dope stocks now to see how this plays out and how it lines up. When enough Robinhood people give up there will be a rally.