Three Interesting Cannabis Stock Charts Heading Into The Weekend

Benjamin A. Smith
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With a dearth of material company-specific news over the past couple of days, we profile three interesting cannabis stock charts to close out the week. None are particularly actionable, but do provide insight into the way investor flows—or lack thereof—are affecting select Canadian juniors. Should a more solid trading/investing case present itself going forward, we’ll let our readers know. But for now, we’re content with providing general observations on three equities not necessarily following Canopy’s current price action structure. Charts and commentary are provided below.

Namaste Technologies

While Namaste Technologies Inc. price action mimics that of most mid/large cap Canadian cannabis stocks since October 16th, something significant happened today. Namaste became the first Canadian midcap cannabis stock (market cap over $500M) to break over the October 23rd rebound high bounding many of its peers. Granted, the stock has been pounded to a greater degree than most. But we’ll be monitoring whether Namaste’s bull break is a telling sector prelude, or an anomaly specific to the company.

Perhaps giving fuel to the bounce was news that Namaste Technologies closed its previously announced bought deal financing, including the exercise in full of the over-allotment option. Despite the deeply negative news cycle since early September—news we’ve covered and won’t rehash—investors scooped up the entire offering, making it fully subscribed.

If Namaste can keep its head down and execute its business strategy, the three-quarters Common Share warrants priced at $3.15 until October 25, 2023 might make a very compelling investment indeed. That’s not much ground to cover on such a lengthy timeline. Next upside resistance points on the hourly: $2.24, $2.45.

James E. Wagner Cultivation (CVE:JWCA)

Above is a chart of James E. Wagner Cultivation Corp. While there’s exactly zero FOMO factor to this setup currently, we note how sellers aren’t exactly beating down the door attempting to exit positions. That in itself makes JWCA’s price action stand out. Bears are in full control because the speculative side of the market is out of favor, and the company’s news cycle is rather thin.

But for those understanding the company’s meticulous operational efficiency, cost-effective business structure and premium medicinal flower, I suspect savvy investors are quietly accumulating, biding their time until the next market moving catalyst presents itself: organic certification. The Canopy Rivers portfolio partner moves into their new 345,000 square foot Kitchener, Ontario facility in Q1 2019.

High Hampton Holdings

High Hampton Holdings Corp. is not a stock I cover or understand extensively. There’s certainly nothing overtly actionable in the chart above. However, the stock is one of the few cannabis LP/operators—on either side of the border—to have recovered all of its post-October 15th price gains. That, to us, is significant.

Midas Letter Raw host Ed Milewski talks to High Hampton interim CEO, Christian Scovenna (October 26, 2018)

Interestingly, the High Hampton joins the ranks of Sunniva Inc. and CannaRoyalty Corp. (now Origin House)—two other predominantly California operators—as companies who have weathered the downturn in cannabis stocks exceedingly well. Clearly, the market is buying—or perhaps more accurately, not selling—Golden State cannabis stocks to the same degree as other market segments.

Benjamin A. Smith

Benjamin A. Smith

Ben is a research analyst and capital markets professional with nearly 20 years of experience. His areas of expertise are broad-based, and include extensive knowledge of macro economics, stock/derivative trading, commodity complexes, cryptocurrencies and technical/quant analysis. He also maintains an particular affinity for U.S. politics and the macro-regulatory environment facing...
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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

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