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The Hydropothecary Corporation (TSXV: THCX)
Hydropothecary has been a marijuana stock with lots of eye on it recently given that they have recently announced that they are to provide Quebec with 20,000 kg of weed. Another part of the equation to potential high future gains has been served. I know what you really want though - what is the chart saying? I’ll let you dig up more fundamentals on Hydropothecary and I’ll deliver you your order of charting analysis.
Today we are going to go over a simple yet powerful candlestick charting technique. You might like the sounds of this, I know I do: Bullish Engulfing. This is a 2-day candlestick pattern. The first day is a red day - that is to say, the prices drop throughout the day. The next day the prices start even lower than they close, but then suddenly the bulls step in and drive the prices back up and close the day higher than the start of the day prior. What we end up with is a candlestick that engulfs the prior days one - hence the term bullish engulfing. This chart pattern is best used when looking a reversal. In the case of Hydropothecary, we can see that since late January it has been seen a lot of downward price pressure. This bullish engulfing setup acts as reversal signal. The great thing about using this signal is that you can set your stop relatively tight to minimize the risk if it does not work out as anticipated. You could place a stop if it the price of the shares drop below the low of the engulfing candle. May your portfolio outlook be bullish and engulfing with gains.