HEMP trade ideas
Buyers bewareAfter market failed a line of buyers I previously mentioned (did not buy as price did not break with volume) and after studying volume I believe this market is going to drop south of the range. If you are long beware!
Market failed line of buyersMarket failed line of buyers on chart I previously posted, this happens and I did not get long as it did not break with volume. I will continue to keep an eye on this market.
Current pivot analysisI tried to link my charts to my previous posts however it did not work, I am not very familiar with this site yet.
take a look at the 2 previous pivots I labeled P2 and P4 near the high of the range, does not take a rocket scientist to see the change in behaviour.
Enter upon a break of horizontal line with volume with a worst case scenario stop at 1.17 THAT YOU CAN AFFORD.
Only enter with increased volume, if market breaks back into range get out.
and whatever you do don't enter until it breaks with volume, short sellers could still win
UpdateUpdating my previous analysis and in future charts I will be describing my thought process exactly as I will be entering it into my personal trading journal. After my previous chart I was able to get a fill the following Monday (December 10) @1.10 long. I rode the market up while locking in profit behind it for 2 days, on the third day I exited at 1.50 as buyers failed what I call an "energy point" @1.65. At these energy points price will do one of four things. It will gap from it (not hitting it, leaving a space) indicating a large move in the opposite direction. It will hit it directly and fail to the point indicating balance and usually a range within the frequency you have. It will pierce and fail showing strength or it will gap directly through the median or energy point showing major strength. When a market does gap (which can be a very bullish vertical move not an actual gap from pre or post market) it will typically reverse and test it from the opposite side offering a potential buy upon showing volume at that level.
To those who do not know what I am using this will seem like allot of lines but all of them have a purpose and a tested probability, It is not the line you draw but how price reacts to it. in this case price pierced the energy point before failing. in penny stocks after there is a spike typically you will see short sellers as probability is in favour of trending downwards so you don't want to hang out take your money and run which is what I did.
I study both fundamentals and technical analysis as both in my opinion are important. Fundamentals move the market however there is always a large operator in any market and you can learn to read them by studying price action. They give tells but they do there best not to by slowly building positions and exiting positions. Buying into sellers volume and selling into buyers volume, creating a range to slowly load up when they do not have enough volume to get there position. These patterns in my opinion are most important to recognise as you do NOT want to be trading against them. Large players have access to information we may not hear about for days however we can all get real time data...
My main goal is always survival, to protect myself from catastrophic losses and control risk. Make no mistake we are competing against very smart people and by controlling risk you are already beating many retail traders in the long run. I do not believe in "mental stops" or letting a trade move -60% ROI just to get out at break even. I use hard stops with a calculated risk I can tolerate to eliminate emotion (which will effect your decision making process). There is always the possibility of black swan news which you cannot control. To put it short I usually know very quickly whether I am going to make money or not. YES your stops can be seen by the "big boys" and yes they can run your stop however if you enter with VOLUME and place stops intelligently they will not take a ton of risk to attack little old you, they have bigger fish to fry.
Anyway regarding fundamentals for this particular stock I believe people are not doing enough research. If you look into the farm bill it states that those with experience growing marijuana containing THC cannot participate in the US CBD market. One of the concerns of the US government is that people can potentially use hemp fields as a cover for growing marijuana containing THC. That eliminates many people from participating and many companies including Hempco as they are owned by Aurora. If you look up Auroras filings and do a bit of research you
will see a some of Auroras management used to work for Hempco.
Regardless I trade price action, maybe people know about a loop hole that I do not which is entirely possible. I see some large orders and accumulation which is what this analysis is based on. As I enter again I will be collapsing my risk and doing my best to lock in profit the same goes with any of my positions.
The following charts will be analyzing buyers and sellers from previous highs in the range.
PS* The lines I draw showing what I think price action will do are a very rough estimate and change frequently.
$HEMP gonna keep pushing$HEMP is strong and has a nice low float with more than 50% held by $ACB
Breaking out beautifully. New highs on deck? Perhaps a little too optimistic?
HEMP Pennant Breakout?HEMP recently broke downward trend line. It has been consolidating in a pennant pattern. Pennant line convergence soon? Possible breakout higher.
LONG HEMP.ca (TSX)nice set up here. other cannabis stocks are pulling back, showing some strength here. Long on a break up
perfect support found, back into uptrendI had hypothesized earlier that hempco could find support at previous resistance level after being in a very harsh downtrend. now blasting upward through resistance on news of Aurora cannabis's investment, showing that the bulls are still very much alive.
might test top of wedgeA few factors lead me to believe this stock might make a short term reversal.
First, RSI showing that bear strength is getting weaker. Additionally it seems to have formed a very short term double bottom (can be observed better in a short term timeline graph). On top of this price action could bounce off of 24% fib.
The trading range is decreasing as the wedge is getting more narrow, i wouldn't be surprised if the price action were to test the upper limits of the wedge if not break it altogether.
Well have to see how this develops till the end of the week
HEMP: Potential Bottom at $0.89?Observations:
Whenever there is a massive uptrend at such an alarming pace, we always see long drawn out corrections.
We see the next fib level support is at $0.89 which could potentially be a buy zone.
Also included some thoughts around the timing of the correction but I would take those with a grain of salt.
Fundamentally, this company is going through some transitions and I believe in them for the long term.
Disclaimer
For informational purposes only and not deemed as financial advice.
HEMP Analysis
If you follow my charss, you know I don't often include equities, but in the wake of the marijuana craze, legalization and industrial hemp coming back to America, especially as an alternative commodity and farming it is worthy of a closer look. HEMP, inc. is an up and coming industrial hemp manufacturer and processor with plenty of upside potential and little downside risk. HOWEVER, REMEMBER, AS WITH ALL PENNY STOCKS, DOWNSIDE RISK IS 100% due to volatility and small trading volume. You may not be able to exit the trade if the %$#@ hits the fan, so set your loss tolerance accordingly. I will look for a surge in volume as the Dragon takes flight to increase my position as company earnings prove this company worthy of institutional investment. Good trading!
