Technology Is Frothy Even With A Marijuana Sunrise | Greg Schnell | Market Buzz


* music * Welcome to the next decade of Market Buzz.
I’m Greg Schnell the, Canadian Technician and the host of this unique show. We look
for long time fair trades on weekly charts. Please follow me on twitter at
@schnellinvestor, go check out my website at gregschnell.com, and hopefully
follow me on on StockCharts on the blog’s tab under your ChartWatchers,
Don’t Ignore this Chart and the Canadian Technician. So we still got ourselves a
bull market lots going on. I’ll be doing it a little bit of public speaking over
the next week so I just thought I’d let you know I am participating in the wealth365.com summit. There’s about 90 speakers for that one I think. I’ll be presenting
Tuesday morning at 9:00 a.m. it’s totally free and I don’t know if you can
see this on my screen but it’s summit.wealth365.com
and you can click on there and and find my name and register or just register
for the whole conference whatever you’d prefer. Anyway should be a great one lots
of good speakers there lots of ideas and it’s all free. And as well I’ll be on
that afternoon and I’ll be on with David Keller on The Final Bar and that will be
a 4:00 p.m. Eastern so just as the market closes that one’s kind of funny
because I used to do The Final Bar that used to be this you know I had at the
end of the day, so anyway it’ll be nice to be back. Should be exciting so looking
forward to that. And our agenda today is the technology XLK and XLC those two
groups, I know ones communications, are they
unstoppable and then we got a bounce in marijuana names today or or somebody
just lit up in marijuana and finally we got some something more than a spark.
So we’re gonna go through some of the marijuana names and just check them out.
I don’t think, don’t think you’ll be missing any rally by any stretch but if
you’re a trader that might be a place to hide. Go look for something so if the
overall market rolls over maybe these MJ names can’t continue to run. So we’re
gonna look at the confusion on the trade deal, you know, it’s been
so quiet as to what’s actually in this trade deal and I know there’s a couple
hundred people gathering in Washington today to talk about the signing of the
trade deal. I think the real question I have is why aren’t the charts kind of
confirming that? So there was a pickup in in some of the industrial names last
week some of the industrial metals but the industrial metals chart hasn’t moved
a whole bunch yet so we got a whole bunch to try and shoot through. So let’s
do that, we’re gonna jump in to the overall market here. Let’s just hit the
refresh and make sure. I look, I learned something new this morning one of the
things that happens is on on the market movers over here this OGI is a
marijuana name and it was up 20-some percent to start the day and it’s now up
38 percent but it was on the most active list but not on the percent up list and
that I did not understand and I found out the reason for that and one is that
the percent up list the stock has to have a price of at least five bucks
where is the most active it has to have a price of at least a dollar.
So anyway, learned something new just there’s a little bit of a parameter
setting there that that can change it. But if you notice just looking on the
homepage today so this is Aurora Cannabis, this is OrganiGram, this is
Hexo which is also a marijuana name, this is Aphria which is marijuana name,
that’s a Canadian bank, but this is Canopy Growth Corporation so in the U.S.,
the ticker symbols CGC, Charlie-Golf-Charlie. And two oil
companies and then another marijuana name here
Cronos. So lots of marijuana on the most active list and you know finally
somewhat of a heartbeat. I mean these names have been really beaten down. So
we’re gonna cover that in a bit. I want to go back and just talk briefly about
the indexes because I think it’s it’s at a remarkable stage and so we’ll just
cover that off. So first of all I’ve been highlighting on the PPO
how high this is getting. So this is the the run for the last 10-days and it’s
you know Nasdaq was 86.50 to 90.75 so it is that four hundred
and some points in just a a week or so. Anyway so what we could see is this PPO
on the daily levels, I’ll put a pretty high level up around two percent but on
a weekly level we’re up, way up here over four percent now we’re exceeding that
January spike high in 2018 and this is taken on a whole new level of surgency.
So with that the real question would be you know who’s going to add more money
into those big names at the top here and so far the index trackers are doing a
fine job of that. But if we go, I’m gonna just flip over to my other, whoops, not
that one, this one my other look for these stocks and I’m
gonna put up the XLK and what I want to show you here, these are the
technology names and this PPO is over five percent and as you can see in 2018
on that sudden surge, we didn’t get anywhere near that high and now if I
just unwind the tape, whatever we can go 20-years, what we’ll see here is that you
know getting over 5% is a pretty rare beast and we’ll just put a horizontal
line on that, whoops, did something wrong for some reason that’s not opening okay
there we go and I just want to take and go horizontal line, on the wrong line so
nothing there, the horizontal line on this one and you put in 5.0%, 5.0 to 3%
just to show you that this and we’ll pick red or something. Okay and now what
you see here is this red line and so coming off the ’09 lows that
significant surge off the ’09 lows we got to this
level same thing in 03-04 and briefly in 2012 touch that level also. So usually
I mean we’re at a I’ll call it a pretty healthy run rate, so the real interesting
question is, is this normal? Are we at the new normal, where these
stocks can just levitate or or is this a little bit overdone. And so I would just
say make sure that you’re aware of how flamboyant or how enthusiastic the
market is. This probably isn’t a place to add new positions into already run up
names. Ah, XLC, what we see on this one this chart not nearly as bullish. So we
still have that 5% line but this is only sitting at around 3% and so with that 3%
level, I think what what the important message here is the the communication
sector may not have run as much but let’s face it it was a relatively new
sector. There’s still lots of good stocks performing over there, but I think the
important thing to be aware of is just how much these top five names have
started to drive the bus. Now if we look just let’s go pick the new percentage
names today and and what’s getting beat up
I guess toys weren’t a very big seller this Hasbro chart looks particularly
hazardous as it’s starting to break down. On the other side I just want to go back
to this ChartList, what did I do there, sorry wrong tab, what I want to point out
here is you know this is how many stocks are in negative territory today and they
just continue to surge and so with that sort of price action, I mean I don’t
think you want to fight the tape, but you sure want to be careful with it because
we we are so extended. Now you know when we look at the big five so here’s Apple
and obviously we know it’s and running on a bit ,it’s up another
percent today, let’s go find Netflix on here, search, and the point I want to make
on Netflix is that when we look at this chart one thing to be careful of here is
the PPO is right around zero and if this rolls over that’s a pretty hazardous
condition. So, well everything else has been relatively enthusiastic and the
chart is starting to improve in SCTR ranking I think just be aware of how
sensitive we are, and and maybe I should explain that a little bit more, so what
happens is when when momentum goes below zero we call that the winter position
and the big thing about that winter position is obviously when that’s
breaking down that’s a relatively large hurdle. We have so much negative, we have
so much momentum ,or weakening momentum that it’s actually pushing down below
zero and just in here that was a pretty important place to be aware of, back in
July, that was a pretty important place to be aware of. And now here we sit in
January just barely above zero and we’re gonna have Netflix report sometime over
the next couple of weeks probably and and when they report I think the thing
we want to be most in tune with is how sensitive we are here. If this rolls over
right away that’s probably gonna be a major signal for Netflix so try and and
be careful there. If we go look for Microsoft it just keeps going. It’s
almost crazy how much how these big companies have rallied but this one’s up
another 1.46 percent this week and you can see the PPO way up here at five or
six percent that that is very lofty. Now it can stay up there for a long time as
it did in 2018 and and then remember 2018 was a pretty choppy market, we made
a big high and then went sideways and then broke down hard in the fourth
quarter. Microsoft broke down a little bit in the
fourth quarter from 113 to 92 so that’s about 20%, maybe 15%, but I think the
bigger thing to keep in mind is this is really heavy up here on the right
inside and just be aware of of where we’re at. Amazon is a different one. What
we see with Amazon is the PPO is rated 0 also and so I would just use that same
cautionary situation and again, I would not want to short Amazon, it’s a beautiful
stock. I’m just saying that the momentum can be fairly tepid here and if it’s
rolling over at 0 that’s probably a good place to pay attention and make sure
that you don’t get caught offside. So as much as my confidences is soaring for
what the company’s going to be doing in on-time delivery and all that kind of
stuff, the one-day delivery with drones and and that whole build out, I think
that’s probably going to be a great company. And all the warehouses they’ve
been building have a reason and that’s just to get closer. So anyway, just
careful with Amazon. I do want to show Skyworks because I think this stock is
a beautiful example of 5G and it’s been running up very very nicely and the only
thing I will say is that the momentum is starting to wane here, and again, if I was
gonna pick a 5G stock ,this is probably one of the ones I would like to be in.
If you get a pullback to the ten week or something like that that might be a
better entry and that would also line up with prior highs, so pullback to support
and then take off again. Anyway, some of these names look a little frothy and if
you had the chance to take a little bit off the table that would be a good idea.
So we’re gonna take a quick break here we’ll be right back and when we get back
we’ll jump into the MJ names. * music * Okay, so one of the things that’s
happened is just in the last few days the marijuana names have started to
surge and that’s obviously a nice thing. But you need to be ready for that and so
one of the things I’ve done is I have all of these ChartLists created under
different groups and so when something happens I can jump in and I can just go
specifically to that group. So here’s biotech and pharma and then here’s China
stocks we could go look in there and just see how they’re doing since we have
the trade deals being signed today. We got cloud sector and coal industry and
copper mining, whatever it is that you want, cyber security but by breaking them
down into groups the most important thing is that when something happens and
you you want to see if that is happening across the group the easy way to do that
is to have it already set up. And so in this case I have the marijuana names all
set up and very quickly you want to sort them based on the strongest stocks. So
what I’ve got here is SCTR ranking set up for these and you can see that,
you know, we have a few stocks with a SCTR ranking above ten and even
Canopy Growth after it’s big move this week is still 9.1 so it’s
still pretty suppressed or depressed. I think when you start to look across
these there’s a couple that are more interesting charts and how do you build
these names. One of the things you can do is you can Google whatever top ten
marijuana names, or you can Google top ten marijuana REITs or top ten
marijuana growers, or you know, follow, go into some of the ETF’s.
Seed is an ETF that has marijuana stocks in it so you could go in and just check
what they own. That’s kind of how I do it and so I’ve built it over time. So, as an
example, one of my friends on Twitter the other day was talking about this IIPR
which is a real estate company, industrial real estate and I think I
think it builds warehouses for marijuana. So anyway he mentioned it as a marijuana
name so I just put it in my list, doesn’t mean I’m gonna trade it, but it’s in here.
So I have about a hundred stocks in here and most of them don’t have a SCTR
ranking because they’re relatively new. And so that gives us a problem when we
try to sort them because what we’re also trying to find out is if some of these
names could be improving, right, but I’m not really gonna trade a penny stock, a
$0.14 stock, or whatever, so I want to stay on something that’s got a little
bit higher growth. So what I’ve done is I started off clicking on the volume, then
clicked on the close, and then clicked on the SCTR ranking, and by doing that, so
if I click on volume, then click on the close now I’m gonna get the highest
price first and then get the SCTR ranking. What happens is when I don’t
have a SCTR ranking then it will default by price. And so that gives me a
method of making sure that at least I’m looking at the companies that are you
know are trading much better than than a penny stock or whatever. So when I create
that sort, you can scroll down to the very bottom and you’re gonna hit “number
in sorted order”, I’ve already done that so they’re already sitting in the sort
order of either price or SCTR ranking. So now we’re going to go back to the top
and and if you have any questions about that I’ve done a lot of videos on
SCTR ranking sorts, a lot of the Market Buzz shows are on there but every
now and then I’ll jump in and actually start again at the beginning. But what I want to do today is just go look through some of these names and
StockCharts was having a little bit of trouble with some charts loading this
morning so if we get some blanks, we might have to hit some refresh, but we’ll
see. So here’s marijuana companies inverse ETF. So this was going up when
the marijuana names were falling and this is the top-ranked SCTR in the
area or in the the industry group, and what you see here is it’s rolling over
pretty hard. And that might suggest to me finally this is the first time it’s gone
below zero on the PPO, so this probably looks like, at least if you wanted to
trade in a space, this might be the place to look. So here’s Corvus Pharmaceuticals
and there’s a couple of things I like on here so let’s just go and, okay annotates
turned off, so I have to fix one thing here and what we do on this annotation a
couple of things I like to keep track of is just what is the big trend in
momentum well we can clearly see this has been breaking so that’s a something I
like and again if we wanted to put that on price, whatever it would match in here
with this relatively short trend line something like that, or we’ve got a long
trend line that’s just broken in the last week or so. Anyway the bottom line is
it’s starting to break out and that makes it much better. We’re starting to
get new three-month highs on relative strength. All of these are good sort of
basic scan ideas before trying to find new leaders, this one’s at four-month
highs getting on to five-month highs. RSI is getting up around 60
we’d like to it to get all the way back up to 70 to kind of confirm it but,
anyway this this Corvus Pharmaceuticals looks like a pretty nice chart and what
I like about that is it it’s starting to you know take nice shape.Now you know $4
to $6 it was only $9 high, there’s lots of charts that have been beaten up much
more than that. Here’s Scotts, and this is just the
basic fertilizer company, and you can see it hasn’t really pulled back but it is
spring and so lots of things, you know, you could have people adding plantings
and all that kind of stuff, so Scotts fertilizer could could take off to the
upside here and it wouldn’t take much to break through PPOs giving a buy signal
starting to turn up higher. This name has been choppy for a couple of years, ePlus, and
what you see here is, you know, it has the sudden thrusts and then nothing for a
long period of time so maybe it’s about due for its sudden thrust. The only thing
I would just say is it’s so spiky both ways it’s not really something I want to
trade. Here’s that Innovative Industrial Properties Tom Bruni pointed it out.
What you see here is a big downtrend and it’s starting to turn up PPO is starting
to give you a buy signal. I like it that this is at least four to six months, that
helps me I don’t like how straight down this is but you can see that this has
been a pretty good performing REIT and all of a sudden it’s starting to improve
pays out a 3% yield not bad. GW Pharmaceuticals this one’s clearly
gapping up but notice this already it’s already been up 10 bucks and back this
week. Starting to get a buy signal down here and, don’t get me wrong I mentioned
it earlier, but there’s only a few stocks that even have a SCTR ranking worth
looking at and I like them when they get above 30, so something sitting at 14 is
pretty weak and this one’s even in the U.S. so it’s it’s really weak. And then
here is Fire and Flower Holdings starting to turn up and as this one
starts to pick up in strength here, I think one of the things that’s more
interesting is it’s breaking through, you know, kind of an 8-week area of support.
PPO’s trying to cross up so perhaps there’s something there
full stochastic has just gone above 20 so that’s a bit nicer. The difference
between this chart, this gray background or graphite ChartStyle, is weekly and
then daily if it shows up with this brown frame usually. So what you see here
is we’re hanging right around the 200-day moving average for this Cardiol
Therapeutics don’t have a clue what they do, they’re in my marijuana list that’s all
I know, and up sloping is just starting to break
and it’s rolling over a bit here. Doesn’t mean I’d own it or wouldn’t own it,
I’m just suggesting it’s in the group. I do like the fact it’s finally broken the
downtrend but it it I peeled roughly a year ago we’ll see if it can bounce off
this 200 area and start to accelerate higher. So Canopy Growth is the one
that’s been in the news all week and it’s it was one of the bigger names out
there and Constellation Brands had taken a position in it. And on this chart we
see a couple of things and I mentioned this in Don’t Ignore This Chart article
this morning, that’s sitting on the StockCharts website and what you see here is
the relative strength is starting to break down in this name so that’s, that
was a problem and it’s now turned up here we’re at 3-month highs so that’s
your first step on a a bullish look. The full stochastic broke out here early
December, late November and started to push up and that’s looking
nice and it’s broken above the last two months or three months so, all of a sudden
where we’re at three-month highs in price in the stock is coming off a
pretty big base here. This is when the CEO left and, I think it’s when they left,
and and now the stock is starting to migrate higher. In terms of the PPO there’s
still a big long down term trend line that hasn’t been broken but I do like
the fact that this six-month one from June to December is now breaking and
starting to turn up so at least you’ve got some change in the weekly momentum
enough to to get you interested all of these names and I mentioned it in the
article this morning was you’re still dealing with stocks that are just having
one good week so let’s not get too excited I like the fact that the whole
group is trying to move up that is much more encouraging. The one thing I would
say is set your stops and if you get hit just let them go because these things
they still haven’t made a lot of money. Aphria popped yesterday and then today
was down, or popped two days ago and then yesterday was down. Like this still very
volatile space but volatility gives you upside and downside.
So here’s Pyrus International. This stock was over 50 bucks had a big super surge
and everybody thought it was well on its way to whatever and October 2017 was
what we called weed Wednesday in Canada when marijuana was legalized, but this
thing took off to the moon and then has never been there since so from 52
dollars back to 8 or 9, you know, it’s finally above the 10-week moving average
so that looks good and we’re starting to break this year long down trend, so a
little bit of hope for that. Aphria this one big down sloping
trend line in price, trying to finally break through here, again topped around
weed Wednesday and a two-year 18-month pullback, starting to turn up again
finally that would be a nice thing to see.So if you’re interested this you
know some of these names are here but again they’re going to report earnings.
All of these, check when their earnings dates are because they’re gonna be extremely
volatile through earnings and I think right now we have a lot of grow ops that
could more than supply the legal demand in Canada and the U.S. so, so just be
careful because they’re still an underground economy competing. Here’s
CLIQ.TO and you can see this one is a downtrend line here if that was to start
to break that one to be bullish, trying to bounce off their lows of four bucks.
This was all the way up at, you know, ten or eleven during the actual legalization
of that. So Cronos, big downtrend here, having a nice push this week up 25
percent and then you can see that this downtrend here starting in March and now
finishing in December. At least the stock has finally higher it’s moving above the
ten-week moving average for the first time since, really since, the downtrend
started. Wouldn’t mind waiting for a weekly close
to kind of get there. This is the Marijuana Life Sciences ETF and what you
see is a big downtrend here hiding under the ten-week moving average just using
that has been a pretty good force. So finally the average stock in the medical
marijuana is pushing this thing above above the ten-week moving average so
that’s quite comforting. PPO is finally changing and on a weekly chart it makes
it look to me like I’d be interested in trading in these names. But I remember
two years ago thinking you know gee these things are just starting to
repopulate and then they rolled over into January. So just be very aware of
the earnings dates coming up because I think you could get ripped both ways.
Canopy Rivers, this one super surge and then nothing. We’ll just leave that here.
SEED, another ETF, pretty much down trending and finally a little move above
it, somewhat hopeful on the daily. The PPO was it a big downtrend and starting to
try and break through that, so that’s a little bit of good news. CannTrust
Holdings, this one popped two weeks ago above the ten-week
and has migrated sideways and is now starting to follow on. Again this thing
was a thirteen dollar stock down to a buck thirty, yeah, you get the idea
ninety percent off so maybe there’s a bounce in there to three bucks and get
back to the 40-week moving average. Insys Theraceuticals big
downtrend here trying to push back up, again, penny stock. Charlotte’s Web
Holdings big downtrend you know SCTR ranking of 0.5 that
means 99.5% of the stocks are behaving better than that so if you’re if you’re
buying down here you’re definitely bottom fishing. I’ll call it the rotten
fruit at the grocery store and we’ll see if they can start to turn up again. If
you’re a trader these are pretty interesting places to look on the chart
if you’re not a trader I don’t think that they’re ready for long-term
stability. OrganiGram is up 43% this week but from, you know from a two-year
low and all of a sudden it reverses so the shorts covered you got a down
sloping trendline here. I get it it’s a nice move. I think the real question is
you know do you want to buy it after a 40 percent move already so that’s a hard
one. Hydropothecary, HEXO, a big downtrend
here starting to work its way higher again it’s not even above the 10-week
and we got a downslope PPO. If you can start to see all of these turning up I
think that’s helpful obviously an industry group is gonna give you the
most part of the biggest part of the move is when the whole thing is lifting.
So if that was the case you could either play it through the ETF or you could
play it through these individual names. Again, volatility huge. Make sure you know
what you’re doing on the stop side. I wouldn’t let them get too big. Canopy Growth
chart didn’t load, let’s just try that again, so this is the one I
wrote the article about in Don’t Ignore This Chart, so you can go there and see
that. Anyway all of these charts are trying to pop today or this week there
aren’t weekly closes yet so when that happens then you can kind of investigate
it but you’re not late to the party you’re very
early and again a little bit of volatility off the lows might help kick
it up. So thanks for taking the time to join me on Market Buzz. Market Buzz airs
Wednesdays and Fridays at 10:30 a.m. Eastern Time you can also see the
recordings on StockCharts TV YouTube page and you can also find my U.S. and
Canadian market information on the StockCharts YouTube page and lastly don’t
forget about the schedule where I’ll be presenting next Tuesday * music *

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