Cronos Group has been one of the strongest Canadian pot stocks in the past month. It has gone on an epic run the past month, going from $6 a share and hitting high of over $13 a share, an over 100% move. It is has also been great for day trading, with a ton of range and volume coming into the stock every day this month.
Similar to what we did with CGC and TLRY, we are going to discuss what CRON company does, discuss the technical analysis of it, where it’s headed next, and how you can trade it. Let’s start by discussing what the company does:
Cronos Group Inc. Overview
CRON operates as a diversified and vertically integrated cannabis company, based in Canada. The company offers production and distribution platforms of medical marijuana and cannabis oil. Similar to the ETFMG Alternative Harvest ETF, Cronos Group owns a stake — in some cases a 100% stake — in a handful of cannabis-related organizations.
Unlike the Alternative Harvest ETF though, Cronos isn’t just a passive holder. It’s also an incubator of sorts, and will leverage its properties to create new growth opportunities. Case in point: Last month the company inked deals that make it a supplier to several Canadian retail distributors of recreational cannabis. Shortly before that, Cura also tapped Cronos as a supplier.
CRON Daily
You can see how amazing of a run CRON had. Unlike TLRY, it has not just gone straight up 400% without pulling back. It is actually a good sign for longer term holders that CRON has pulled back twice, and hasn’t given back all of its gains from its runup of the past month. You can see on the daily chart above how the breakout over $8 in late August ignited the run in the beginning.
You can see how big of a runup CRON had back at the start of the year, when it ran from $4 to the $11’s in just a couple weeks. When stocks go on a big run once, it means they can do it again. And CRON did exactly that in August and early September. It may even have more upside in the upcoming weeks, as it looks to be holding up in the higher part of its range bullishly.
Trading CRON
CRON is great for those who love trading lower priced stocks, and also want to trade pot stocks. It has excellent liquidity, decent range, and not much nearby resistance on its daily chart. It has a larger float, but still has had great momentum of late. It has been trading with around $1 range on average on most days of late, occasionally more. Unlike TLRY, there is no spread, and no issue with slippage trading this one, even if you are trading large size. There are a ton of opportunities on this stock everyday to the long and short side.
CRON Trade Example
This chart is from CRON back on September 7th. There were two main setups on this: and ORB (opening range breakout) and a flag breakout. The ORB gave us a great buy opportunity right at the open, at 11.70 on the break of the opening range. We got a nice quick .70 cent rip in just 20 minutes afterwards.
After the big move, it started to pullback and consolidate, without giving up too much of its gains from the runup. Once we broke out of the trendline, we got a nice quick .40 pop towards high of day. CRON has had great follow through on these two patterns the past several weeks since it started this epic runup. We are going to talk about even more patterns we use to trade CRON and the other pot stocks on the free webinar tomorrow.
If you missed yesterday’s post on TLRY, you can check out the article here.
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