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Organigram has recently announced that they have signed a MOU with the government of New Brunswick. So we have the fundamentals we need to help drive its stock prices higher. OK, now for the fun part and how you might have found yourself in a position to have been holding Organigram before its recent pop. Let's dive into the technicals and see what has been happening here. Note the above graph is for the weekly candles to help make the illustration clearer and to remove some of the noise on the daily candles.
In the chart pattern for Organigram we can see it is trapped in descending triangle. Essentially we have a floor at the lower horizontal line, but the upper range is downwards sloping. Generally speaking a descending triangle can be seen as bearish and rightfully so while it is trapped within this range. If it were to have continued to be bearish we would have seen it break the bottom line (support), however we are witnessing it break the downtrend it has been caught in. This one I found interesting to play because prior to that breakout upwards one would assume that the bears would continue to drive the prices down, however you need to do some additional comparisons to take note of what is going on elsewhere in the marijuana space. Note that I charted both Aphria and Canopy, two of the other major players against Organigram. Traditionally these stocks tend to follow each other more or less. It can be observed that both Aphria and Canopy started diverging away from Organigram’s price. When you notice these signs it is best to pay attention and keep a close watch for the bears to retreat back to the woods where they belong for such a stock like this.
Organigram Holdings Inc (TSX:OGI)