Charts, Charts, Charts

by JDH on April 20, 2019

Today, lots of charts.


Let’s start with Tesla:

Tesla had a good week, bouncing from $258 on April 15 to close the week at $273.  Is this stock out of the woods?


The chart tells the story.

It is still in an obvious downtrend, and is still and excellent short candidate.  They aren’t selling cars, and this weekend, on Good Friday night, with the markets long closed, Tesla announces that it will be shrinking the board of directors from 11 to 7 people, because, you know, when you are doing this well, you don’t need advice from your board.  (I wouldn’t want to be on a board of a company that was about to go bankrupt either).

If you would like an alternate view, here is a completely delusional article by a Tesla fan boy, who thinks Tesla will rule the world.  Check back in a year and we will see who is correct.


Of more interest is gold.

This chart is also not great.  The uptrend line that started at $1,200 back in November was broken at the end of March.  Of greater worry is the very strong support at $1,275.51 which was touched on January 4, January 21, January 24, and then broken on April 16.  As I write this gold has inched back above $1,275, so it is not clear whether or not this support level has broken, but it is not looking good.  If it doesn’t hold this week, the next support levels are around $1,240, $1,210, and $1,200.

What to do?

If you want to roll the dice, buy gold.  This could be support.

A more prudent approach would be to place stink bids on the solid gold stocks you want to own, and accumulate on weakness, but also keep some cash handy.  My plan over the next month or two is to accumulate cash, and that’s what I’ve been doing.

Sell in May and go away, you know.

Pot Stocks

Finally, pot stocks.

Let’s start with Canopy Growth Corp, with the apt ticker symbol WEED.TO

It’s up significantly from the Christmas Eve bottom below $35, and had a big bounce on Friday, closing at just under $60.  It hasn’t broken to new highs, yet.

I’m holding.

Not buying, not selling.

My guess is that April 20 will see a nice bump for the pot stocks, because, you know, 4-20 is a big number in the pot world.  (You can Google it).

The RSI on this stock is 55, which is a good number to be buying, so it may have more pop left.

Longer term, I suspect the US pot stocks will outperform the Canadian ones, as they have not yet had their run, and as the US moves closer to full legalization.

Finally, my biggest cannabis holding, TGOD.TO, has had a rough time of it lately.  I did sell some earlier this month; will keep an eye on it to see where support lies.

Canada has had issues with the legal stuff.  Supply is limited, it’s very expensive, and the quality isn’t great.

So, if you want to use it, it’s easier to buy better quality stuff from “your guy”, which is less of an issue now because the stuff is sort-of legal, so the stigma of using it is reduced.  That hurts the legal producers in the short term, but may help them in the long term.

So, I’m holding.

And, raising cash.

That’s the plan.

See you next week.