Volatility can be our friend, as well as a drag. This week, Big Cannabis had what it took to outperform the S&P 500, thanks to a basic rule of market physics.
Stocks like Aurora Cannabis Inc. (NYSE:ACB) plunged to statistically improbable levels in recent weeks, but statistics is a field where exaggerated moves in either direction always correct sooner or later.
That’s what happened this week. Canopy Growth Corp. (NYSE:CGC) and Tilray Corp. (NASDAQ:TLRY) joined the rally as well.
The fundamentals for the group didn’t change much. Only the charts stretched too far to the downside. Now that they’re snapping back, I’m eager to see how far the rally goes.
After all, every bull run starts with a bump. Some stop there. But when a stock really gets rallying, we can all cheer.
Either way, my subscribers in IPO Edge don’t buy the majors or trade for instant gratification. We’re in small names for a holding period that can be measured in months, not minutes.