E The Canadian Cannabis Report - Monday, Mar. 8

TM Editors Note: This article discusses one or more penny stocks and/or microcaps. Such stocks are readily manipulated; do your own careful due diligence.

For the trading week ended March 5, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 8.5% compared to the prior week when it increased by 12.2%. The index consists of 25 stocks, many of which are among the most widely held holdings of the 3 ETFs (MJ, CNBS, and THCX) that I consider to be a reliable barometer of the Canadian cannabis sector. MCCCIs differentiated business model is both weighted and market capitalization based because I believe that this approach best represents the current landscape of the Canadian cannabis sector. Now let us look at this week’s good, bad, and ugly stocks.

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The Good

There were no stocks that increased by more than 10%, which is my metric for inclusion in this category.

The Bad

There were 7 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: VVCIF -17.6%, FLWPF -13.9%, SPRWF -12.0%, APHA -11.9%, OGI -11.6%, RDDTF -11.0% and NEPT -10.8%.

The Ugly

There were 2 stocks that decreased by 20% or more, which is my metric for inclusion in this category: MEDIF -26.6% and WDDMF -21.7%. Valuation Metric Review There was a decrease of 8.5% in the “Big Four” compared to last week when there was a decrease of 13.0%. Canopy Growth Corporation, which is by far the largest capitalization in the MCCCI, has decreased 5 weeks in a row to the delight of the swing traders among my private clients. The other 3 “Big Four” stocks also decreased, and I believe may face continued price pressure for the foreseeable future.

Recap

There was a decrease of 2.8% in the relative strength index compared to last week when there was a decrease of 11.2%. There now has been a 3-week decline in the ratio of the top quintile stocks to the bottom quintile stock which solidifies my 2021 thesis of a frothier environment for the highest capitalization MCCCI stocks. Let us see how this volatile sector has performed at the same time next week shall we?

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Comments

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William K. 1 month ago Member's comment

I was expecting at least a short discussion of what was thought to be the force behind the increases and decreases.