Bear market action continues, and we believe that cash remains the best choice at this time. There was an oversold bounce on Friday, and there may be more upside, but these bounces can not be trusted to last at this point.
There are few favorable charts outside of the energy sector, but there are many extremely oversold stocks and sectors. The corrective action has been very uneven, and there are some groups that have been correcting for much longer than some of the big caps.
One of the sectors that have been correcting since February 2021 is cannabis. The AdvisorShares Pure Cannabis ETF (MSOS) has fallen from around $56 to $14. This ETF is comprised mostly of US-based multi-state operating companies that have had great growth, but the sector has been hurt badly by political inertia and poor market conditions.
We believe that MSOS is starting to form a significant bottom and that there should be some positive catalysts coming soon. We are slowly accumulating a position, but overall market conditions can send it lower at any time.
As always, we would not chase MSOS on Monday morning but will make some small incremental buys as the chart starts to develop. It is very oversold, but that doesn’t mean it will be able to regain good momentum any time soon.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and will buy or sell at any time for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in MSOS To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.