I was extremely confident that the Cannabis stocks were going to selloff after becoming legal in Canada. It was a classic case of ‘buy on the rumor, sell on the news.’ They did in fact sell off, and the selloff was bigger than I thought it would be.
Here is HMLSF…the Horizons Marijuana Life Science Index ETF. Last month it hit resistance right at the $20 level. This wasn’t surprising because that is where the highs were back in January. After selling off it spent a few days consolidating around $15 before it broke support. There was support at $15 because it was resistance from February through July. It will now probably become a resistance level again. It is oversold now, and may find support around the $11.40 level. This is where the lows were in April and August.