AusCann Group Holdings LTD (ASX: AC8)
AusCann tells another story of a stock that went on an epic tear when news of Australia adapting a medical marijuana program in the country. Whenever a stock goes from 1 cent to > 80 cents we can expect some significant profit taking to occur. After all, what these charts are showing us is historical human psychology in a visual manner. If you held a stock at 1 cent and it went to 80 we can clearly understand why sellers might show up. Both the share price and the RSI has broken out of a two-month downtrend and is attempting to make new highs. I circled the volume on the break of the downtrend as the gap up led to people looking to sell into it. With the 200-day moving average more than 100% away from current share price levels I am always extra wary (call me conservative). From what I can gather of the company in a fundamental sense though, if you are bullish the emerging Australian Cannabis market then this stock is going to be one of the clear winners. A push above short term moving averages (9 & 20 DMA) would be very bullish.
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