As many in the United States look forward to a long weekend to commemorate the Fourth of July holiday with hot dogs and fireworks, Profit Scanner powered by Recognia uncovered a hit from the group of marijuana stocks that looks to be igniting.
Colorado-based United Cannibas Corp. (CNAB) launched in 2007 and acts as a consultant and supplier for medical marijuana treatments. Like many marijuana stocks, shares of CNAB were worth just a few cents when it went public in late 2013, but it has skyrocketed more than 1000% to hit the $10 range at its high.
CNAB has since settled down, but spiked big-time at the end of June from less than $1 to about $3.50. Traders are wondering if marijuana stocks can keep getting higher, and, according to CNAB’s chart, the answer is yes.
At the July 2 close, CNAB’s chart indicated a bullish Head and Shoulders Bottom pattern emerged, which could take the stock from current levels of $3.40 to a high-side target of $5.40 to $5.90.
The Head and Shoulders Bottom pattern is expected to play out in just 39 trading days. So, if the pattern is valid, the target should be achieved by approximately the end of August for at least a 58% gain at the low-end.
But there is resistance at $3.60 for CNAB, so traders may wish to wait for a close above that level before establishing positions.
If you do go long, remember that a stop loss is always a good idea, especially for volatile marijuana stocks, and Profit Scanner sets a reasonable stop at a close below $1.51.
A reminder that U.S. markets close early Thursday, July 3, and will be closed Friday, July 4, to observe Independence Day. We’ll return with your next actionable Trade of the Day on Monday, July 7.
Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.