CannTrust Holdings Inc (TSE:TRST), Hydropothecary Corp (CVE:THCX) Lead In Mixed Cannabis Session

CannTrust Holdings Inc (TSE:TRST) (OTCMKTS:CNTTF) (FRA:C9S) and Hydropothecary Corp (CVE:THCX) (OTCMKTS:HYYDF) (FRA:74H) lead in mixed trade today. This is a continuation of momentum seen following MedReleaf acquisition rumors starting swirling last week. Both companies are considered front-runners as takeover targets themselves as consolidation fever starts sweeping the industry.

By the numbers, it was another strong session for CannTrust Holdings. The stock finished higher by $0.64 to $9.08/share (↑7.58%). Volume hovered close to 2-month highs, and more important, was sustained enough to allow for continued price extension.

Overall, prices came within a couple of dimes from testing the technically important $9.40-9.50 area, where prices previously topped following cannabis’ winter swoon. At over double the average daily 3-month volume and strong close (upper quadrant), buyers show no overt signs of give. In fact, volume was higher today than it was on Friday—a testament to the voracity of the move.

Much the same can be said for Hydropothecary, albeit to a more muted extent. The stock rose by $0.35 to $4.84/share (↑7.80%), finishing closer to TRST on a percentage basis than the previous two sessions. Volume has been more subdued in comparison, but still finished 1.7x ADV. The company did announce news they would be hosting an “investor day” in New York City on May 16, 2018, which may have provided slight impetus in share price strength.

But overall, the talk on the street continues to be about which companies provide the best ancillary value in a MedReleaf Corp. takeout situation. From the market’s point of view, that’s clearly CannTrust and Hydropothecary Corp at the present time.

The Hydropothecary Corporation CEO Sebastien St. Louis joins James and talks about the company’s billion dollar offtake agreement with Province of Quebec alcoholic beverage administrator SAQ over 5 years

Here’s how the Top 10 stocks in the cannabis sector played out. Again, the list is dominated by the mid-majors, which have outpaced ever since MedReleaf acquisition rumors surfaced.

We take particular note of OrganiGram Holdings, which surged higher after 2:00 pm today and finishing at the daily highs.

Is Canopy Growth On The Precipice of a Huge Breakout?

Has the time come for Canopy Growth Corp (TSE:WEED) (OTCMKTS:TWMJF) (FRA:11L1) to catapult to a different stratosphere? While the volume profile did not provide confirmation, the technicals are starting to align. The formation is headed into the ninth inning.

Regular readers of the Midas Letter will be familiar with the thesis (for a primer, please click here). In a nutshell, Canopy Growth is forming a well-defined symmetrical triangle (ST) which is narrowing to an actionable conclusion. If this was just a simple pattern without supporting metrics, it would mean little. However, the ST comes with high sustained supporting volume, little moving average entanglements (only to the downside), and upcoming catalysts galore. In my opinion, when the move happens, it will be powerful and decisive.

As we can see from the chart, we may not be quite there yet. Canopy Growth traded as high as $30.92/share by midday, only to the session lows by the close. Volume never really indicated a breakout was imminent, as shares traded well below its 3-month daily average. Whether the breakout/breakdown will be more a process than event remains to be seen. But the stock has very little resistance-free roam in which to roam.

Should prices start entering the $33/share range on above average upside volume, this will provide a powerful signal the next cannabis bull run has arrived. In any event, something big this way comes.

Original article: CannTrust Holdings Inc (TSE:TRST), Hydropothecary Corp (CVE:THCX) Lead In Mixed Cannabis Session

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