The One Chart That Reveals The Future Of Marijuana Stocks

The One Chart That Reveals The Future Of Marijuana Stocks
The One Chart That Reveals The Future Of Marijuana Stocks

The stage is set to make 2018 the biggest year for marijuana stocks yet.
The Seed Investor realizes it sure doesn’t seem like it right now.
The “Marijuana Meltdown” we’ve talked about over the last few weeks is in full swing.
However, marijuana stocks are poised to make a major turn very soon.
Here’s one chart that shows exactly why.

The Storm Before The Calm

Before we look at this chart, there’s something you have to understand about the overall markets right now.
Recent volatility has turned them completely upside down.
Growth stocks, which normally do best, are down and value stocks are holding up the best. 
Oddly, the greater the growth opportunity a stock is looking at, the more the stocks suffered.
Look at Amazon (NASDAQ: AMZN) or Tesla (NASDAQ: TSLA).
Shares in these world-changing companies with years of disruptive growth ahead have been slammed in recent weeks.
They’re top growth stocks which have turned down big in an upside down market.
Marijuana stocks, which are looking at even more growth than those high-flying tech stocks, have done even worse…
And that’s a very good thing.
One chart will show you exactly what I mean.
Take a look at Aphria Inc (OTC: APHQF | TSX: APH).
Aprhia is the one of the largest marijuana companies in the world.
The stock had an amazing run in 2017. It ran from a low of under $4.00 per share to just shy of $20. At its recent peak the company was valued at right about $4 billion.
Since then things haven’t gone so well. Aphria shares have collapsed to a low of $7.76 this week.
That’s a total decline of 61% in less than three months time.
It certainly looks ugly right now for Aphria. But that’s actually a very good thing.
Look at the chart below to see what I mean.

The chart shows Aphria’s crazy run-up and subsequent painful crash.
For average investors, this would be a huge worry.

After all, most investors think since a stock is down that something must be wrong.
Of course, that kind of thinking is why they’re average investors.
The most successful investors are able to look beyond the volatility and focus on the long-term trends.
That’s successful investors see something much different in Aphria’s recent decline..
Looking back at the chart, you’ll see Aphria shares have given back almost all of their gains from the rally in late 2017.
However, if you look at the long-term trendline, Aphria is still going up.
In other words, if you cut out the bubbly run a few months ago and the drop which followed, Aprhia is still in a long term bull run.
And that’s the key to it all right now.
Marijuana stocks like Aphria have not collapsed, they’ve merely returned to reality…
And in an industry that’s poised to offer triple-digit growth for the next few years, reality is a great a place to buy in.

Round Three For Marijuana Stocks Starts Now

The stage is set for 2018 to be the biggest year in marijuana stocks yet.
The Seed Investor is focused on Canadian stocks because it is months away from fully legalizing marijuana.
On top of that there is an election coming up in 2018 where an additional 10 states could add some form of legalization.
This is the same combination that jump started the marijuana bull market back in 2016.
Now, even though marijuana stocks have gotten hit hard recently, is set to happen all over again. 
Best regards,
The Seed Investor

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