When markets sell off it is worth paying attention. It is easy to get caught up in red screens and panick. But the real value comes from looking at markets and sectors that show relative strength during market turmoil. One such market that deserves the top spot of 2019 is cannabis, and it suggests that our bullish Cannabis stocks Canada forecast for 2019 is well underway. This is, according to us, the really important message to investors when we see cannabis sector leader Canopy Growth trade near all-time highs at a time when most stocks trade below their long term averages.
Canopy Growth is the sector leader in the cannabis sector. Its stock price peaked at all-time highs last year at 76 CAD. Right now, just 3 weeks after stock markets set a major bottom on their charts, it is trading at 64.6 CAD. That is just 12% below all-time highs.
At a time when most stocks are fighting to rise back above their 200 day moving average, and several are still (way) below their 90 week moving average, the important question to ask is “what exactly does this mean for investors in 2019”?
To us, the message is crystal clear: the cannabis sector shows relative strength during market turmoil, and is the first to recover aggressively. This is where investors want to put their money.
Because of this we believe that the cannabis sector might qualify as one of the top 3 investment opportunities of 2019.
So then why is only Canopy Growth rising, and several other cannabis stocks only moderately rising?
That’s because Canopy Growth is the sector leader. It leads the sector higher and lower. The sector leaders tends to get a bid first, but also get sold first. It is a leading indicator for a sector.
That’s why we believe the cannabis stocks we tipped earlier will rise strongly in the next few months.