New Age Beverages A New Age Beverages drink.
The Arora Report is projecting that twice as much money will be made in marijuana drinks than marijuana itself. For this reason, investors need to learn how to take their share of the profits that will be made in marijuana beverages.
The 11 pointers I recently gave to investors in marijuana stocks have generated a lot of interest. To read about them, please see “How to potentially become a marijuana millionaire, albeit carefully.”
In addition, there is one important thing that investors need to know about marijuana beverage stocks. Before discussing this one important thing, let us build the background with two charts.
Charts
Please click here for an annotated chart of New Age Beverages NBEV, -10.73%
Please click here for an annotated chart of India Globalization Capital IGC, +48.12%
Please note the following:
• There is an abundance of information on the internet about news and opinions. However, there is an almost complete lack of practical information with actual real-life signals that can help investors buy at the right time and then sell at the right time. There is also a complete lack of information about the best way to set stops, raise stops, position sizing and other defensive measures that are necessary to be successful when trading marijuana stocks. The best way to learn is from real-life examples, and that is the purpose of this column.
• The Arora Report gave a buy signal on New Age Beverages at an average price of $2.46. The chart shows that this signal was given before the big runup.
• The chart shows that The Arora Report gave a sell signal at $10.24 in the pre-market on New Age Beverages. This turned out to be the high.
• The chart shows that The Arora Report gave a signal to sell-short New Age Beverages at $8.80. The short-selling was a call for the price of the stock to decline. Sophisticated investors can make money from both stocks going up and stocks going down. Caution: Short-selling is dangerous.
• Arora’s buy-to-cover zone for New Age Beverages was $3 to $4.20. As the chart shows, this target was rapidly achieved, producing profits.
• Many subscribers to The Arora Report who had previously made profits from the long side by selling New Age Beverages at the high of $10.24 bought the stock again in the $3 range.
• The chart shows the second Arora sell signal on New Age Beverages generating substantial profits.
• The chart for India Globalization Capital shows that the Arora buy signal was given at $2.93 before the big runup. Along with buy signals, The Arora Report simultaneously gives target zones and stop zones. The initial second target zone for India Globalization Capital was given at $5 to $6.
• The chart shows that Arora’s target for India Globalization Capital was raised with probabilities given for different target zones. The highest target for Indian Globalization Capital was set at $10.75.
Ask Arora: Nigam Arora answers your questions about investing in stocks, ETFs, bonds, gold and silver, oil and currencies. Have a question? Send it to Nigam Arora.
The most important thing
The charts and the actual trades shown above have now prepared you to understand the most important thing about investing in marijuana beverage stocks at this time.
Imagine a fast-moving bus on autopilot that’s working erratically and unpredictably. Imagine that your job is to jump on this moving bus without getting hurt. Imagine that you are making a lot of money while on this bus, but then you have to jump off, taking your money along with you without getting hurt. The key phrase here is “without getting hurt.”
Caution: At this time, marijuana beverage stocks are not good long-term investments because they are not driven by fundamentals. However, marijuana drink stocks are highly tradeable with great potential profits, as demonstrated above, with actual real-life signals. The volatility is very high as these stocks are driven by short squeezes and sentiment. Trading these stocks is akin to the analogy of the moving bus given above.
The most important thing for investors wanting to make profits from marijuana drinks at this time is to trade these stocks in a manner to not get hurt. From the charts shown above, it is easy to see how investors who get on the wrong side can lose a lot of money.
In addition to the bigger cannabis stocks such as Canopy Growth CGC, -3.44% Cronos Group CRON, -2.83% Aphria APHQF, -6.86% and Tilray TLRY, -6.07% there are lucrative trading opportunities in lesser-known cannabis-related stocks such as DAVIDsTEA DTEA, +61.33%
As a group, marijuana stocks do not move in line with the Dow Jones Industrial Average DJIA, +0.45% S&P 500 Index SPX, +0.11% and Nasdaq 100 NDX, +0.16% This can provide important diversification.
Please also read:
How to survive marijuana stocks’ rollercoaster ride
The new ‘Tilray’ marijuana stock is here — this is how to set up the trade
Enjoy Coke — and the money it might make for marijuana investors
Tilray is the poster boy of short-squeeze stock candidates — here’s how to find others
Seven reasons Big Tobacco is likely to make a move on the marijuana industry
Marijuana investors have a new reason to believe they will get rich
The strange case of Nio reveals a risk in the U.S. market
Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article. Nigam Arora is an investor, engineer and nuclear physicist by background who has founded two Inc. 500 fastest-growing companies. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com.
