TGIFF Stock: Patience Is Warranted
The appetite for marijuana stocks continues. Investors’ insatiable appetites are responsible for the incredible returns that many, if not all, of the constituents that make up this sector have experienced over the past few months.
During that time, finding a good marijuana stock was not a difficult endeavor because the entire sector was moving in unison, as if a rising tide was lifting all boats. After such a substantial move has taken place, however, picking a good cannabis investment takes a little bit of precision.
Given that many of these names are now in the midst of price corrections, this notion is especially true.
I am focusing on Friday Night Inc (OTCMKTS: TGIFF), (CNSX: TGIF) stock because I find this stock chart to be orderly and obedient. I believe that, if I apply my skills in technical analysis, I will be able to use this company’s stock chart in order to speculate where the Friday Night stock price is heading next.
The following technical indications on the stock chart were instrumental in suggesting that a bullish move toward higher prices were in development.
Chart courtesy of StockCharts.com
TGIFF stock began its move toward higher prices when it broke above resistance at $0.25, which was established shortly after the stock began trading. If you follow my work, you already know that many great bull markets have begun with this exact characteristic.
In short order, just a few days later, a golden cross was generated when the faster 50-day simple moving average crossed above the slower 200-day simple moving average. A golden cross is a popular technical indicator which confirms the notion that a bull market is in development. And in this case, it did not disappoint.
After resistance was broken and the golden cross was generated, Friday Night stock appreciated to the tune of 400% before the stock price took a breather and began to correct.
The golden cross is currently in bullish alignment, and the TGIFF stock price is trading above both moving averages, suggesting that the bullish signal is firmly intact, and that, therefore, a bull market is still in development.
Whether higher prices will prevail is difficult to determine at this juncture, but the price action has been constructive in nature, so I can use it in conjunction with an influential momentum indicator to determine when an advance is likely to occur.
The following stock chart illustrates the constructive price action and the momentum indicator that I currently watching.
Chart courtesy of StockCharts.com
This TGIFF stock chart has been annotated in order to highlight the wave structure that is responsible for creating constructive price action.
The wave highlighted in green is the impulse wave, and this is the one that traders want to capture because it defines the period in a bullish trend when a stock makes a sustained move toward higher prices.
The wave highlighted in purple is the consolidation wave, and this is the one that traders want to avoid, because it defines the period in a bullish trend when the stock price corrects and refrains from advancing. This wave is very important because it functions to create the necessary conditions for an advancing impulse wave to follow.
Impulse waves and consolidation waves feed off each other and, in an alternating wave structure, they are the building blocks that create and sustain a trend.
TGIFF stock is currently within a consolidation wave, and a bullish resolution of this pattern will imply that an impulse wave is in development and that higher prices are on the horizon. Such an event will likely coincide with a bullish signal generated from the moving average convergence/divergence (MACD) indicator.
MACD is an indicator that distinguishes whether bullish or bearish momentum is influencing a stock. This is pertinent information because a stock cannot sustain a move toward higher or lower prices without the applicable momentum being present. Therefore, it is not a mere coincidence that the type of wave that is in development coincides with this indicator.
In January, 2018, a bearish MACD cross was generated, indicating that lower Friday Night stock prices were likely to prevail. It coincided with the development of the consolidation wave that is currently in development.
The MACD indicator is currently converging, and a bullish resolution of the consolidation wave will coincide with a bullish MACD cross. When such an event occurs, it will suggest that another impulse wave is in development, and that a move toward a new all-time high is a reasonable expectation.
I am currently watching a number of indications on the Friday Night stock chart because I believe they will suggest when TGIFF stock is ready to make another move toward higher stock prices. As a result, I am currently holding a neutral bias on this investment until I get the necessary indications suggesting that a bullish view is warranted.