Newstrike Brands Ltd NWKRF

RE:RE:RE:Thoughts on NewStrike QTR Report and affect on Shareprice

[silkroad007]

Quin - I know what day trading is and i know what short selling is.   I have a margin account myself, although I never use it.  I prefer long.

What you refered to below in the original post saying "Shorters" it implied short sellers not day traders looking to sell high and buy lower.  Thats simply called a day trader as noted.  However it is a long position just bought and sold daily.  Implying day traders who sell high are "Shorters" is misleading.

Typically when someone says shorters its refering to selling the stock short.  ie your regular definition of short selling.  This in turn creates short squeezes when they are forced to cover when the stock continues to rise.

Also MM useually means marker maker not manupulator but I assume your just being comical there.

quinlash wrote: Hey Silk,

What you are describing is referred to as Day Trading.  This is when an investor / shareholder believe a shareprice is going to pullback and there is an opportunity to sell their shares (or a portion of their shares) and then buy them back again later at a cheaper price.  Day Trading is also used to refer to short term trades where the shares are sold on a high then bought back a few days or week later, again, when the seller believes they will see the shareprice drop below the price which they sold at.  Quarter reports are favorite targets for day traders and many will move onto a stock just before the quarter report is expected then sell their shares again right after the report is issued.  This is fairly typical when a QTR report is expected to be favorable.

Shortselling is a completely different beast and cannot be performed through a regular trading account.  For someone to short a stock they require what is called a margin account.  It would be better for you to look up short selling on YouTube for a better explanation than what I could provide here on the board but long story short (pardon the pun) yes, the short seller essentially buys the stock when it is high and counts on the shareprice going down.. sounds odd I know but the videos break it down better.  

Check this video out for more details;

https://www.youtube.com/watch?v=Z1LctxzEREE


What we see on MJ stocks is coordinated groups of short sellers sending pumpers onto bullboards to start promoting the stock as something that will reach completely crazy levels.  These guys are pretty easy to identify if you look at their profile details,  tyically their accounts are created the same day or maybe a day or two ago and all of their posts are either pumping or bashing a stock.  These guys are usually on a commission and get a cut of the profits, or paid per post, when the shorting effort pays off.

Once the short position has been taken out the bashers move in to scare off investors and remove the support from under the shareprice.  Once the support has thinned out the shareprice will fall, typically helped out by new investors who panic and sell becuase there was a sudden change in the shareprice... when the shortseller believes the price has bottomed out they will cover their position (cash out) then, often, buy up the shares themselves on the low... rince and repeat and you have a group of people who are making money on a price increase AND making money when it pulls back... betting there are a number of WTFs being muttered right about now.. anyhow that's the world of trading, the better you understand it and the better you understand the value of your holdings the less these things will affect your trading

When Ggeeman and I start talking about fake support we are often referring to short-sellers setting up a play on the stock... if you see us use MM, that refers to MARKET MANIPULATORS...  they are the muggers of the stockmarket... their weapon is a keyboard...

hope that helps a few people understand what they have been seeing on the MJ trading patterns a bit better... 

Take Care,

Qunn

silkroad007 wrote: Quinn I think you are a bit confused on what a short is and how its made.  They dont first buy shares and then sell.  Shorters, short sell a stock and then buy back the shares lower. 

quinlash wrote: Been giving a lot of thought to what may happen with the HIP Shareprice once the QTR report comes out.  Thought I would share it with the board to see if anyone had a different view of things.

I am thinking that if we get a poor or mediocre sales numbers the HEXO shareprice will either pull back a little or stay flat, respectively.  If we get a strong sales number then I would expect the shareprice for HIP to quickly run up to par with the HEXO shareprice after the .06332 share conversion.  It may even go over par by a half or full cent with FOMO buyers and likely some amount of shorters hitting the stock. 

If shorters come out in full force (pretty sure there is an organized group of them hitting stocks at the same time) then the shareprice may go over conversion by 2 or 3 cents (just my guess) before the shorters start dropping shares back into the market resulting in a fast and dramatic drop in the HIP shareprice.

On a strong report the HEXO shareprice should (in theory) bump up a bit but I think the affect will be delayed until the HEXO investors start to react.  As with HIP, there may be shorters looking for an opportunity to short HEXO as well so trading (mostly for buyers) will be risky.

Considering the price at which each stock is trading at, the percentage gain factor is in favor of day trading holdings in NewStrike so those holding both stocks and looking to daytrade will likely make their moves for the intraday/short-term gain.

Long and short… if we get a strong sales report I would expect a completely ridiculous jump in volume.  Where it all shakes out and closes at (likely within a few days or a week post-report, as seen on the last HEXO run) will likely tie back to the new evaluation of the HIP/HEXO combination with some amount of price reduction to account for risk of the deal not going through.

It would be prudent to revisit your thoughts on where HIP / HEXO is headed, how likely the deal is to go through and what your thoughts are as to what the short, medium and longterm shareprice may do.   After that give some thought to what you will do on a poor, good or strong sales report and what price points should be targeted and what you will do once the price hits. 
If you have decided to be a long haul investor, and will hold regardless of the report, I would suggest trying to avoid looking at the shareprice the day the report comes out, especially if you are prone to emotional / knee-jerk trades.

You need to decide for yourself what kind of sales numbers you would need to see in order to consider it poor, strong or somewhere in between.
 
This may sound way too complicated, but it is essentially this is the same process you should be doing when first investing in a stock and planning your strategy, contingency plans and eventual exit of the stock. 

I have been a HIP bull for a long time, beaten, scared, mal-nourished, dragged through the mud and subjected to one form of neglect after another but I have already decided to ride out the HEXO deal and willing to wait until the vote this summer to see what happens.
 
Anyhow, hope this helps,

GLTA