As such, I have found it useful as a trader to use Canopy as a barometer for how the other LPs will trade in that given day, week, or month. When Canopy starts rocking the rest of the sector usually does too and it usually gets me looking for entries into names that haven’t broken out yet (and who have less professional traders to trade against) to move in the same direction as Canopy is. Here is their last 4 months:
After going on an epic tear from August to November Canopy understandably settled down for roughly a 2 month down trend (on reducing volume) which was broken right at the start of 2017. I kept the bollinger band width on the bottom to show that Canopy was trading at it’s tightest range in a long time before volume picked up and it broke out in February.
Volume is a very key indicator as it represents demand in the stock. We will likely not see any kind of significant moves in a stock’s price without an increase in volume to accompany it. The fact that Canopy is seeing an increase in volume (with price rising) should be a clear indication that investors are starting to come back into the cannabis stock names and should get us cannabis investors excited and on the hunt for profit making opportunities.
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