I have a tougher time reading LPs than I do MSOs. I have no idea where the bottom will be.. I feel the energy changing a bit. Bear volume is certainly lacking compared to recent times and we're starting to get to a point where any potential news almost HAS to be good. It almost can't get any worse than this. This is how I felt with the broad market when we had the trade deal with China going to shit, Hong Kong shit happening, impeachment shit just getting underway... it was almost like, **** we're at rock bottom in terms of what is being priced in - the market HATES uncertainty. And whenever you see slight hope for some closure in a headline, the market reacted in a positive way. Starting to feel similar with MJ but... We could always go lower. It's really tough to say where the bottom will be. I'm betting on CGCs earnings being better than expected and starting a bit of a reversal. There's a possibility of a headline spin on earnings too. Not sure how much the market will buy it but the price fell almost 50% during the quarter ended 9/30, so derivative liabilities would have gone down accordingly. Of the total loss of $1.28B CAD for the June ending (Q1) quarter, they show a loss of $1.18B in warrant liabilities. They'll presumably show a huge gain because of the drop in stock price during Q2--enough for an Aphria-like "We're actually profitable" headline.I have no feel for the sector anymore, so happy to hear about anything that sticks out for you.
I think there's a clear cycle going on with MSOs. SP is very easily to manipulate with not a significant amount of money. A select few whales can make or break them. So it seems like they are being cycled through with TRUL being the prize these days. Granted, with the recent capital crunch across the sector, they are looking great fundamentally as well, but if CGC has another leg down and sets a lower low? They're my bet to be shorted to shit as they catch up to the other names that have bled of late. GTII was the prized darling not long ago.. Earnings came, they smashed projections, and they were TRUL-like for a long time; I sold most in the 14's and have reloaded since in the 10's (fully realizing that further downside is possible). CGC then got another leg down.. And GTII died a horrible death. FYI, I ran the numbers and projections for GTII's earnings in two weeks are shockingly low. They should be a lock to crush them. So perhaps that's a play. I think the fact that they didn't publicize their proforma revs last ER caught a few analysts for a loop. I'm expecting 71-75mil. Most projections have them in the mid-high 50's, which honestly has a 0% chance of happening.
Anyway the CSE/OTC names are nothing but trading vehicles at the moment. They are feasting on the weaker names and names with a cloud of uncertainty around them of course (CL-OH of late, IAN, MMEN etc) and leaving alone the TRUL's of the world (since their share unlock they've been strong as hell.. although if they get too far ahead and the sector doesn't turn around.. look out). But at the end of the day it's all a game. I have a decent read on it but a lot of the time the SPs are at the mercy of a select few high rollers. I mostly stay out and basically decide to use this as a buying opportunity for companies with a strong cash position and a clear path to profitability moving forward (which has become extremely important in this bear market). As I already said, GTII is my pick for that.