Three Overbought Canadian LP's To Watch

TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Canadian licensed medical marijuana producers were under pressure yesterday and we are monitoring how this trend continues today.

Although we have been favorable on this rally, we expressed some of our near-term concerns earlier this week as these stocks were trading at very overbought levels.

Following yesterday’s pullback, several medical marijuana producers under our coverage are no longer trading at overbought levels and we are favorable on this dip.

Corrections of this nature are healthy and we are keeping a close eye on trading activity. Although trading volume declined when compared to the prior two days, it was still well above its monthly daily average and we are watching this metric.  

3 Overbought Canadian LPs to Watch

We want to highlight three Canadian licensed medical marijuana producers that are still trading in overbought territory following yesterday’s drop and provide insight into where we see the shares going.

Canopy Growth (WEED.TO) (TWMJF) edged lower yesterday and the shares are still trading at overbought levels following this drop. Canopy is by far the largest and most diverse licensed Canadian medical marijuana producer. The company is comprised of several wholly‑owned subsidiaries and has increased its reach by making investments and acquisitions of companies all over the globe. We are favorable on Canopy Growth and continue to view the company as one of the most attractive cannabis investments available.

Aurora Cannabis (ACB.TO) (ACBFF) continued to rally yesterday and the shares are up almost 15% in September. The licensed medical marijuana producer continues to execute and shipped 50 kilograms of medical marijuana to its German subsidiary earlier this week. Aurora has one of the strongest balance sheets when compared to its peers and is levered to several emerging growth trends throughout the world. Aurora has more than 19,000 registered patients in Canada. We are favorable on the company’s leverage to other legal markets and see it as a company to watch.

Cronos Group (MJN.V) (PRMCF) edged lower yesterday and the shares have been on fire, rallying more than 15% in the last week. The shares have been trending higher after the company was admitted into the Nasdaq International Designation program. This is an over-the-counter (OTC) platform designed to provide member companies with Nasdaq's visibility offering, allowing for greater access to U.S.-based investors. Cronos recently expanded its reach into Germany and Israel. We are favorable on these recent developments and view Cronos as a stock to watch.