HMMJ Rallies to 2-Week Highs; Sets Stage For Additional Gains

Benjamin A. Smith

The Horizons Marijuana Life Sciences Index ETF (TSE:HMMJ) (OTCMKTS:HMLSF) rallied through a current consolidation zone today, setting the stage for a test of the February high ($22.57) . The strong price action provided temporary clarity to a muddied technical picture, where Tier-1 leadership had been absent recently.

The sector leaders essentially moved in uniform fashion today. Leading the charge was Cronos Group, which finished up ↑6.67% on the day. Close behind were Aurora Cannabis ( ↑6.36%), Aphria ( ↑6.13%), and Canopy Growth ( ↑5.18%). The only major only partial joining-in was Tilray, which gained a modest ↑1.82%.

More importantly, every major except Tilray has formed a higher-high pivot on the hourly, suggesting whatever grip bears have mustered has dissipated. With all majors trading above their simple 200-day moving average, the predominant trend remains higher.

Even more impressive is the performance of select mid-majors—although this out-performance has been rotating between issues. OrganiGram Holdings was today’s big winner, surging 8.94% after signing a letter of intent with the Société Québécoise du Cannabis (SQDC) to offer their wares. A couple of sessions ago, it was CannTrust Holdings and Village Farms International that swelled on multi-day runs. Conspicuously absent from the festivities is Hexo Corp., which fell for the fourth straight session—although all daily losses have been modest.

The generally strong, upwards-grinding broad market price action has helped keep the bears in hibernation. Volume continues to trade generally below trend, which won’t serve to change the sector’s direction from bullish to bearish. Furthermore, HMMJ finished at session highs—above a 7-day consolidation zone. This bodes well heading into tomorrow’s session.

While there’s obviously no guarantees on what comes next, the path of least resistance is clearly higher. With heavily-weighted Tier-1 cannabis breaking higher to print pivot higher-highs on the hourly—and HMMJ itself doing the same—the benchmark ETF could produce some quick gains tomorrow.

A daily close above $22.57—on above trend volume—would be supportive for further upside extension in the days ahead.

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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