Tech stuffThis week when talking to a fellow investor friend about where this was going I told him there are two scenarios from a tech perspective. First was that we have a similar consolidation of the run from high 50s to 70 at the high 60s level which it was doing and if it started to break 70 and trade there for a couple sessions it would continue the parabolic rise and go to the 80 levels, Sadly for longs the other scenario I said was that it was forming a classic head and shoulders pattern and risked a steep drop from 64 range to 58 where it will start forming the second shoulder in the pattern. I had felt this was more likely considering the volitlity and volumn that came with the 10+_ jump on tues wed morn after laburday and the subsequent crash to mid 60s so I held off playiing any day trades due to this fear of getting caught in the downdraft.
Well luckily I slept through the bulk of the crash and was able to make a few bucks flipping in the volitilty under 60. Scary part for me is that I stayed long. The panic selling might take it as some have suggested to low 50's fri at some point but I feel pretty good about holding for now until i see where the next shoulder range develops. Usually it should range now between 57 and 61 for as long as a couple weeks maybe assuming there is no major material changes to current plans and policies.
The ugliness could be very bad though if there is not a support level reached to start forming the second shoulder or after some sideways days it breaks the neckline at 56 and starts down again, in this scenario we get a full body head and shoulders which dropps it back to mid 45s or about where constellation did the deal where it should get another round of support .
When dealing with an almost pure speculation play such as weed ,technicals are sometimes all you have to go on ,greed and fear NEVER change and thats why these patterns develop and have been for centruies.
Good luck to all in the game and lets hope we start to see that right shoulder form SOON!