Canadian CANNAINVESTOR Magazine November 2017 - Page 266


Cannabis Wheaton Income Corp. fundamentally speaking can be wrapped up as an interesting company involved in marijuana in a very unique way - and yes it does seem that they have some rather interesting partnerships in the making here now too. OK, enough with the company itself and time to dive into its chart. I’d like to talk about volume. No, not the volume of your hair. We all know no one will ever be able to top Jaromir Jagr. I would like to discuss volume by price. Volume by price is a rather simple concept to grasp. It means exactly what it sounds like. That is to say the amount of shares traded (volume) over a particular price range (closing prices). Notice the horizontal bars on the far left side of the chart. This is displaying our volume by price.

We can use the volume by price indicator as an additional means to help locate our resistance and support levels. The math behind this is telling us that shares typically tend to trade around the price where the most volume is highest, as indicated by our volume by price levels. So in the chart below we can see that the majority of the prices have been right around where we are currently trading. This can make you feel somewhat more comfortable in taking a position in Cannabis Wheaton right now as you know you will have support around the current prices. In the price drop displayed in the blue box, you will now know that there will likely be resistance as we approach the green line price levels. One thing to note within the blue box there is that even though the price stayed lower for a good stint of time, the amount of volume traded there was low in comparison to other time periods. This is something to keep in mind when using this indicator. As always, it is wise to combine other indicators when possible. Another charting pattern that can be seen here in addition to our price by volume discussion would be a wedge as we have previously discussed in prior issues.

Cannabis Wheaton Income Corp. (TSXV: CBW)