Is The Cannabis Sector Mounting A Multi-Wave Rally After The Recent Bottom?

After the early 2021 Cannabis rally, lead by Reddit and other speculators, the past 90+ days of price activity in this sector has resulted in a narrowing consolidation/momentum base setup. Just last week, many Cannabis symbols broke above a downward sloping price channel that suggests a new bullish price wave/phase is setting up. It is very likely that this new bullish price phase may extend into a multi-wave price rally over the next 6+ months where some symbols may rally 30 to 60% or more.

ALTERNATIVE HARVEST ETF BREAKS DOWNTREND – TARGETING $24.50 (+30% FROM RECENT LOWS)

This Daily MJ chart highlights the type of upward price rotation we are seeing across many Cannabis stock symbols. The extended downtrend from mid-February till the early May lows has now been broken with bullish price trending. It is the opinion of my team and I that this rally may continue to extend higher in multiple advancing waves – eventually pushing the Cannabis sector price levels well above our initial target levels.

I am using a simple Fibonacci Extension (or Measured Move) technique to identify initial price targets, focusing on the initial recovery attempt from early to mid-March 2021 in most cases. We believe this range represents an accurate attempt at a breakout price rally phase resulting from the current momentum base setup in mid-May. If our research is correct, MJ may attempt to rally to $22.40 then $24.50 before stalling and attempting to briefly Flag sideways. We may see a further wave of price advancement after this initial bullish price phase completes – indicating that this could be the start of a much bigger upside price trend.

(Click on image to enlarge)

TLRY MAY RALLY OVER 100% IF THIS RALLY CONTINUES TO OUR EXTENDED TARGETS

This Daily Tilray (TLRY) chart highlights a similar breakout/momentum base pattern. Notice how TLRY consolidated in a very similar price range to MJ and extended the momentum base level, near $13.50 to $14.00, for almost 30 days before finally breaking above the YELLOW downward sloping price channel. This extended downward/sideways price trend, lasting more than 70 days, suggests any potential upside price breakout may last at least 35 to 45 days before running into any substantial resistance (roughly 50% to 61% of the consolidation range).

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