The Canadian market giveth and the Canadian market taketh away. It has been a couple of weeks since our last report on January 11 called Forget Kodak, UrbanImmersive Is The Next Ethereum Miner To Pop. It looks like the hiatus was well timed. While the trade on UI hasn't worked out so far, at least it didn't drop as much as some other stocks in the cryptocurrency and weed industries did last week. Now that there has been a major pullback we have an opportunity to pick up shares cheap. A company that we think is bound for a huge reversal this week is Canopy Growth Corporation (TWMJF) (WEED.TO).
To understand why we chose this stock, you have to understand the mechanisms that control the stock market now. There is no such thing as a bubble on the way up and a burst on the way down. Both of these moves are bubbles. On the way up we see a bull bubble and on the way down we see a bear bubble. How can we tell this? Bull bubbles are created through speculative ideas that gain momentum on the way up. With high short interest and put options, being bearish on a stock allows for exact mirror image speculation, instead of the traditional view of a bubble bursting as people run towards safety, which we don't think a lot of cannabis investors have done based on their consistent tone. Let's look at the chart:
TWMJF broke through its 50-day MA support. The next stop looks like the teens at its 200-day moving average. And that's the whole point. Anybody can look at this chart and say sell. Short sellers piling in based on some easy-to-read chart signal are setting themselves up for a squeeze. The RSI is down to 37 which is the lowest we have seen it on this stock for a long time. In our view that's another buy signal as it heads toward oversold territory.
The other carrot-on-the-stick dangled in from of short sellers is the idea that Canopy is massively overvalued. Based on the name of our blog, we would agree with that when looking at it with this very simplistic view point. A company with a $3.6 billion market cap that only had $18 million (CAD) in sales last quarter looks highly overvalued, even with a high growth rate. But that's also another problem for shorts. This is too easy and too obvious of a story. There are plenty of biotech companies out there that trade at very aggressive multiples. For instance, ACADIA Pharmaceuticals (ACAD) trades at a similar market cap to TWMJF and has been that high for years despite just starting to generate revenue in late 2016. The barriers to entry are very different as ACAD is protected by patents and all Canopy has is scale. But it also has a much wider-reaching market.
Canopy and the other weed stocks are overvalued due to speculation. And there are several different angles from which one can speculate on Canopy and weed in general. It looks like marijuana will be legalized in Canada, but that is not what we think will drive Canopy's value. There is a rise in the idea that Canada will be the go-to place for global medical marijuana supplies. The mid-term elections in the United States will likely see Democrats gain seats and if they flip either the House or Congress, Jeff Sessions' crusade against cannabis will be met with powerful opposition.
The political climate for cannabis companies in North America could not have been better timed. The Trump administration's tax policy is causing companies to repatriate their cash, which means they will have plenty more to spend on acquisitions. But his behavior outside of economics and tax policy is isolating a lot of people who voted for him. If Democrats take back control in 2018 and beyond and succeed in continuing to implement favorable policies for marijuana by state and eventually at the Federal level, Canopy and other growers would become of great acquisition and partnership interest in multiple industries. This would include pharmaceuticals, tobacco and alcoholic and non-alcoholic beverage industries where there is plenty of cash to go around.
We believe that the collapse in Canopy's price over the last couple of weeks represents a short bubble through aggressive shorting rather than investors running away from the stock. We expect periods of high volatility and heavy swings in either direction, but general increases in price as people who sold at the top look to get back in and others who agree with our bullish stance on the weed sector look to do some dip buying. Both of which will add pressure to a short squeeze, especially to latecomers who shorted the stock based on its break down of support at the 50-day MA.
Now an update on some of our other Canadian trades, most of which have been profitable.
Global Cannabis Applications, or GCAC (FUAPF) (APP.CN)
GCAC has been one of our most consistent and profitable calls. We first called it in our article A Cannabis and Blockchain Story on November 5 when FUAPF was only $0.09, weeks before many other sites chose it and at a lower price. It has hit as high as $0.77 but like Canopy has dropped over the past couple of weeks and closed on Friday at $0.37. We picked up some shares on Friday and plan to pick up more, ideally at a cheaper price. But we are stating this very clearly because we have some mixed feelings on GCAC now. First we will start with the bad:
The CannaLife app is not that impressive so far. In our article A Cannabis and Blockchain Story II: Turning a Concept into Reality, we were very complimentary of CEO Bradley Moore and his ability to keep his early-stage promises. Now is the time to advance past the early stage. The app has still only generated a few hundred Android downloads according to Google Play and there is not a lot of activity from users on it. It's still not clear exactly how they will make money off of it. So far it looks like a collection of interesting articles about the medical benefits of cannabis organized by ailment, but not too much else that anyone would consider proprietary to the app.
A paid promotion. We have seen articles on GCAC from Wealthy Venture Capitalist. Their writing is good, but they are focused more on what GCAC might be able to do rather than what it has accomplished or plans to accomplish in the near term. Our issue here is that this is a paid promotion. In the disclaimer on the site it says this: "The Wealthy Venture Capitalist’s controlling parent company has been compensated $39,500 per month for 3 months by Global Cannabis Applications Corp".
We believe that GCAC could put that $118,500 to much better use, like by developing Citizen Green instead of paying others to promote the stock. And what does this say about this website Wealthy Venture Capitalist? Why do they need to be paid $118,500 for? If they are any good at what they do, they should be able to make way more money trading stocks and giving out honest reports without payment like what we do. We don't get paid by the companies or anyone for the reports we do. All our revenue from this website is from Google Adsense and sponsors of paid services unrelated to the stock picks we make.
This is why we stated that we are still long on GCAC. The only time we ever see paid promotions pointed out is when the people pointing them out are short the stock and want to trash it as a scam. We are pointing out a paid promotion on GCAC and we are long the stock, because we are honest. We don't like the paid promotion, but there is enough good about the stock to overlook this and go long anyways.
The major reason why we are keeping a significant position in FUAPF is that the ICO looks like it is going well. GCAC has recruited Antanas Guoga to create the Citizen Green token so we know that GCAC is very serious about this. We think that this novel idea of leveraging an ICO as currency for a rewards program on Citizen Green has a decent chance for success. The functioning ICO could service as means of exchange within the Citizen Green economy. But first GCAC has to increase the user base like it has demonstrated an ability to do in the past with its previous apps.
On January 7, we mentioned three high-flying Canadian stocks that had a connection to GCAC through one of its large investors, Sheldon Inwentash. We had diversified our win on GCAC to get into these three positions. Two of them immediately doubled which we used to get into UI, the third staggered and we kept it. That ended up being a good decision because even though UI dropped, these other stocks dropped a lot more than it after the move up.
St-Georges Eco-Mining (SXOOF) (SX.CN)
We do not recommend this stock anymore. It suffered a major tank and there has been lots of insider selling with no insider buying even at these lower prices. We also don't like the CEO that much after listening to his interview with Agoracom, a promotions service.
ThreeD Capital (BWSOF) (IDK.CN)
This one looks still okay to buy for one reason only. CEO Inwentash purchased 600,000 shares at $0.313. He obviously believes very strongly in his company to buy this much on the open market when he owns a lot of shares already.
Fintech Select (Selectcore) (SLXXF) (FTEC.V)
This one has dropped so low that it only has a $10 million market cap on the U.S. symbol. It is creating a network of thousands of cryptocurrency point of sales locations across Canada. Several of them are up and running already which can be seen at selectcoin.io. The company is paying off old debts at a discount and increasing revenue in its existing fintech businesses as well as trying to get into this new business. It is by far the cheapest of these four stocks and has the most advanced set of businesses. We continue to hold a position.
If you like our picks make sure to follow our blog by clicking the follow button on the top of the left hand panel. We are up to 446 followers despite not giving out a lot of alerts, a fact that we think is indicative of a diligent and prudent stock picking history. If you would like to share this blog, make sure to use the URL "nasdaqnewsreports.blogspot.mx" as certain spam filters on social media don't let you post blogspot.com addresses.
Disclosure: We are long stocks listed in this report.
Despite a recent pullback, Bitcoin has gone from a concept worth pennies a few years ago to worth thousands of dollars. It may appear to some who are late to the game that the opportunity to get rich is gone. However, there are still plenty of ways to make some money trading in bitcoin and other cryptocurrency. Here are some links to valuable reports and strategies:
The Cryptocurrency Codex from the Cryptocurrency Institute
Secrets To Unlimited Free Bitcoin
The Crypto-Currency Evolution eBook
Bitcoin Complete Guide for Dummies
The Bitcoin Miracle Guide
The Bitcoin Cheat Code Book
The Crpytocurrency Course
Bitcoin Investing Live
If you're interested in making money investing or trading the stock market, here are some good resources to assist you. This includes technical analysis, investing in the weed sector, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies.
Microcap Millionaires Free Video: Cheap Gold Miner Set to Soar in Fall 2017
The dividend stock report from dividendstocksonline.com
To understand why we chose this stock, you have to understand the mechanisms that control the stock market now. There is no such thing as a bubble on the way up and a burst on the way down. Both of these moves are bubbles. On the way up we see a bull bubble and on the way down we see a bear bubble. How can we tell this? Bull bubbles are created through speculative ideas that gain momentum on the way up. With high short interest and put options, being bearish on a stock allows for exact mirror image speculation, instead of the traditional view of a bubble bursting as people run towards safety, which we don't think a lot of cannabis investors have done based on their consistent tone. Let's look at the chart:
TWMJF broke through its 50-day MA support. The next stop looks like the teens at its 200-day moving average. And that's the whole point. Anybody can look at this chart and say sell. Short sellers piling in based on some easy-to-read chart signal are setting themselves up for a squeeze. The RSI is down to 37 which is the lowest we have seen it on this stock for a long time. In our view that's another buy signal as it heads toward oversold territory.
The other carrot-on-the-stick dangled in from of short sellers is the idea that Canopy is massively overvalued. Based on the name of our blog, we would agree with that when looking at it with this very simplistic view point. A company with a $3.6 billion market cap that only had $18 million (CAD) in sales last quarter looks highly overvalued, even with a high growth rate. But that's also another problem for shorts. This is too easy and too obvious of a story. There are plenty of biotech companies out there that trade at very aggressive multiples. For instance, ACADIA Pharmaceuticals (ACAD) trades at a similar market cap to TWMJF and has been that high for years despite just starting to generate revenue in late 2016. The barriers to entry are very different as ACAD is protected by patents and all Canopy has is scale. But it also has a much wider-reaching market.
Canopy and the other weed stocks are overvalued due to speculation. And there are several different angles from which one can speculate on Canopy and weed in general. It looks like marijuana will be legalized in Canada, but that is not what we think will drive Canopy's value. There is a rise in the idea that Canada will be the go-to place for global medical marijuana supplies. The mid-term elections in the United States will likely see Democrats gain seats and if they flip either the House or Congress, Jeff Sessions' crusade against cannabis will be met with powerful opposition.
The political climate for cannabis companies in North America could not have been better timed. The Trump administration's tax policy is causing companies to repatriate their cash, which means they will have plenty more to spend on acquisitions. But his behavior outside of economics and tax policy is isolating a lot of people who voted for him. If Democrats take back control in 2018 and beyond and succeed in continuing to implement favorable policies for marijuana by state and eventually at the Federal level, Canopy and other growers would become of great acquisition and partnership interest in multiple industries. This would include pharmaceuticals, tobacco and alcoholic and non-alcoholic beverage industries where there is plenty of cash to go around.
We believe that the collapse in Canopy's price over the last couple of weeks represents a short bubble through aggressive shorting rather than investors running away from the stock. We expect periods of high volatility and heavy swings in either direction, but general increases in price as people who sold at the top look to get back in and others who agree with our bullish stance on the weed sector look to do some dip buying. Both of which will add pressure to a short squeeze, especially to latecomers who shorted the stock based on its break down of support at the 50-day MA.
Now an update on some of our other Canadian trades, most of which have been profitable.
Global Cannabis Applications, or GCAC (FUAPF) (APP.CN)
GCAC has been one of our most consistent and profitable calls. We first called it in our article A Cannabis and Blockchain Story on November 5 when FUAPF was only $0.09, weeks before many other sites chose it and at a lower price. It has hit as high as $0.77 but like Canopy has dropped over the past couple of weeks and closed on Friday at $0.37. We picked up some shares on Friday and plan to pick up more, ideally at a cheaper price. But we are stating this very clearly because we have some mixed feelings on GCAC now. First we will start with the bad:
The CannaLife app is not that impressive so far. In our article A Cannabis and Blockchain Story II: Turning a Concept into Reality, we were very complimentary of CEO Bradley Moore and his ability to keep his early-stage promises. Now is the time to advance past the early stage. The app has still only generated a few hundred Android downloads according to Google Play and there is not a lot of activity from users on it. It's still not clear exactly how they will make money off of it. So far it looks like a collection of interesting articles about the medical benefits of cannabis organized by ailment, but not too much else that anyone would consider proprietary to the app.
A paid promotion. We have seen articles on GCAC from Wealthy Venture Capitalist. Their writing is good, but they are focused more on what GCAC might be able to do rather than what it has accomplished or plans to accomplish in the near term. Our issue here is that this is a paid promotion. In the disclaimer on the site it says this: "The Wealthy Venture Capitalist’s controlling parent company has been compensated $39,500 per month for 3 months by Global Cannabis Applications Corp".
We believe that GCAC could put that $118,500 to much better use, like by developing Citizen Green instead of paying others to promote the stock. And what does this say about this website Wealthy Venture Capitalist? Why do they need to be paid $118,500 for? If they are any good at what they do, they should be able to make way more money trading stocks and giving out honest reports without payment like what we do. We don't get paid by the companies or anyone for the reports we do. All our revenue from this website is from Google Adsense and sponsors of paid services unrelated to the stock picks we make.
This is why we stated that we are still long on GCAC. The only time we ever see paid promotions pointed out is when the people pointing them out are short the stock and want to trash it as a scam. We are pointing out a paid promotion on GCAC and we are long the stock, because we are honest. We don't like the paid promotion, but there is enough good about the stock to overlook this and go long anyways.
The major reason why we are keeping a significant position in FUAPF is that the ICO looks like it is going well. GCAC has recruited Antanas Guoga to create the Citizen Green token so we know that GCAC is very serious about this. We think that this novel idea of leveraging an ICO as currency for a rewards program on Citizen Green has a decent chance for success. The functioning ICO could service as means of exchange within the Citizen Green economy. But first GCAC has to increase the user base like it has demonstrated an ability to do in the past with its previous apps.
On January 7, we mentioned three high-flying Canadian stocks that had a connection to GCAC through one of its large investors, Sheldon Inwentash. We had diversified our win on GCAC to get into these three positions. Two of them immediately doubled which we used to get into UI, the third staggered and we kept it. That ended up being a good decision because even though UI dropped, these other stocks dropped a lot more than it after the move up.
St-Georges Eco-Mining (SXOOF) (SX.CN)
We do not recommend this stock anymore. It suffered a major tank and there has been lots of insider selling with no insider buying even at these lower prices. We also don't like the CEO that much after listening to his interview with Agoracom, a promotions service.
ThreeD Capital (BWSOF) (IDK.CN)
This one looks still okay to buy for one reason only. CEO Inwentash purchased 600,000 shares at $0.313. He obviously believes very strongly in his company to buy this much on the open market when he owns a lot of shares already.
Fintech Select (Selectcore) (SLXXF) (FTEC.V)
This one has dropped so low that it only has a $10 million market cap on the U.S. symbol. It is creating a network of thousands of cryptocurrency point of sales locations across Canada. Several of them are up and running already which can be seen at selectcoin.io. The company is paying off old debts at a discount and increasing revenue in its existing fintech businesses as well as trying to get into this new business. It is by far the cheapest of these four stocks and has the most advanced set of businesses. We continue to hold a position.
If you like our picks make sure to follow our blog by clicking the follow button on the top of the left hand panel. We are up to 446 followers despite not giving out a lot of alerts, a fact that we think is indicative of a diligent and prudent stock picking history. If you would like to share this blog, make sure to use the URL "nasdaqnewsreports.blogspot.mx" as certain spam filters on social media don't let you post blogspot.com addresses.
Disclosure: We are long stocks listed in this report.
Despite a recent pullback, Bitcoin has gone from a concept worth pennies a few years ago to worth thousands of dollars. It may appear to some who are late to the game that the opportunity to get rich is gone. However, there are still plenty of ways to make some money trading in bitcoin and other cryptocurrency. Here are some links to valuable reports and strategies:
The Cryptocurrency Codex from the Cryptocurrency Institute
Secrets To Unlimited Free Bitcoin
The Crypto-Currency Evolution eBook
Bitcoin Complete Guide for Dummies
The Bitcoin Miracle Guide
The Bitcoin Cheat Code Book
The Crpytocurrency Course
Bitcoin Investing Live
If you're interested in making money investing or trading the stock market, here are some good resources to assist you. This includes technical analysis, investing in the weed sector, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies.
Microcap Millionaires Free Video: Cheap Gold Miner Set to Soar in Fall 2017
The dividend stock report from dividendstocksonline.com
The dividend stock report from Dividend Stocks Rock
Top rated signals for binary options from binaryoptionsprosignals.com
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review shows how to time the market with its "Percent of X" indicator
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
Try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
Top rated signals for binary options from binaryoptionsprosignals.com
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review shows how to time the market with its "Percent of X" indicator
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
Try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
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