Back on August 28 after the close, I shared bullish commentary on the cannabis group which was melting down at the time.
I wrote:
“…it is hard to imagine sentiment getting more negative towards the cannabis group. Generally, times of negative sentiment extremes are times to buy, or at least not sell.”
“More clarification from Trump on where he stands could be a catalyst for the group.”
AdvisorShares MSOS 2X Daily (MSOX), a leveraged position I singled out, traded at 1.70 when the markets opened on August 29. This morning it is up 17% to trade at 2.
AdvisorShares Pure U.S. Cannabis (MSOS), another position I suggested, is up 8%.
So, that was a good call. But what’s going on and what to do now?
As I suggested, clarification from Donald Trump landed. His comments are bullish and they have sent the group soaring. Essentially, in a tweet he suggested he is in favor of Florida’s referendum to legalize recreational use, and legalization in general.
What to Do Now
This is a nice move, but without another catalyst soon, it will probably fade to some degree. The future is always unknown, but I suspect there may be a dearth of catalysts in the near future.
If you are a trader, consider selling the strength. I will do some selling to capture profits on positions purchased last week. But mostly, I am a buy and hold investor, so I will wait for what I expect will be bigger moves as more developments play out over the next year. Taking some profits near term is probably not a bad idea, though.
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