Canadian CANNAINVESTOR Magazine April 2017 - Page 82

Here we have a Japanese candlestick daily chart of one of our Licensed Producers Aphria INC (TSXV:APH; OTC:APHQF) which you can tamper with yourself for free by going to (or a variety of other sites). The wick of the candlestick (thin line) represents the range in which the stock traded on that particular time frame, with the bodies representing the open and close of that same time frame. The Legend of what you are viewing is clearly located in each box of the chart and for further reading on anything found in this article or other aspects of technical analysis, the internet is full of lessons and instructions.

In the top box we have the RSI indicator which stands for ‘Relative Strength Index’. This indicator attempts to show if a stock is overbought (RSI 70 and above) or oversold (RSI 70 and below). For the cannabis sector I think RSI should be used sparingly, as we are in an industry that is experiencing huge change and just because a stock is ‘overbought’, does not mean the stock will suddenly experience a sell off. Take Canopy (and most cannabis stocks) from October to November for example: