TGIFF Stock: Patience Is Still Warranted
A full-on correction has not only gripped the marijuana sector, but the entire stock market has been subdued with selling pressure. Speculation was running rampant and stocks were making tremendous gains in a very short amount of time. As a result, a correction was needed in order to restore health to the bullish trend that was getting very much overheated.
I believe that once this much-needed correction has run its course, which is very soon, cooler heads will prevail and constructive names in the marijuana sector will once again make a move toward higher prices. I have Friday Night Inc (OTCMKTS:TGIFF), (CNSX:TGIF) stock on my radar because the TGIFF stock chart remains constructive and it opens up the possibility that a move toward higher prices is in development.
The last time I focused on Friday Night stock, on January 30, 2018, I suggested that patience was warranted, which was the right call because the stock price has obviously continued to correct. I still believe that patience is warranted, which is the staple of any good investment strategy. So as a result, I am watching and waiting for a number of indications that will suggest when a move toward higher TGIFF stock prices is in development.
These indications are highlighted on the following stock chart.
Chart courtesy of StockCharts.com
This Friday Night stock chart highlights the constructive price action that was responsible for the advancement in price, which began in early November, and the moving average convergence/divergence (MACD) indicator.
Constructive Price Action
Constructive price action is a wave structure consisting of impulse waves and consolidation waves, which are responsible for creating a bullish trend.
The impulse wave, highlighted in green, is advancing in nature and defines the period in a bullish trend when a stock makes a sustained move toward higher prices. The consolidation wave, highlighted in purple, is corrective in nature and defines the period in a bullish trend when the stock price refrains from advancing and instead corrects.
Corrective price action is necessary in every bullish trend because it acts to restore the trend’s health by unwinding any overbought conditions that were created during the impulse wave that preceded it. This creates the necessary conditions so a new advancing impulse wave can sustain a move toward higher prices.
TGIFF stock is currently within the confines of a consolidation wave. This consolidation wave is characterized by a series of lower lows and lower highs. This price action creates a descending channel, where price support is defined by connecting the series of lower lows and price resistance is created by connecting the series of lower highs.
A bullish resolution of the consolidation wave will only occur when Friday Night stock breaks above resistance. A completed consolidation pattern will imply that a new advancing impulse wave is in development, suggesting that higher TGIFF stock prices are on the horizon.
The completion of the consolidation wave and the development of an impulse wave will likely coincide with a bullish signal generated by the MACD indicator.
MACD is a trend-following momentum indicator that distinguishes between bullish or bearish momentum using the crossing of a signal line. This is significant and pertinent information because a stock cannot sustain a move toward higher or lower prices without the applicable momentum supporting it. As a result, this indicator has a great track record of confirming which wave is in development.
In early November 2017, a bullish MACD cross was generated, implying that bullish momentum was influencing the price action in TGIFF stock and, therefore, higher stock prices were likely to prevail. This signal correctly confirmed that an impulse wave was in development and the Friday Night stock price proceeded to appreciate by an incredible 681.25%.
In January 2018, a bearish MACD cross was generated, implying that bearish momentum was influencing the price action in Friday Night stock and, therefore, lower prices were likely to prevail. This signal confirmed that a consolidation wave was in development, which is currently still in development.
The MACD indicator is still currently in bearish alignment, but the signal lines that generated this indication are currently converging. This means that a bullish MACD cross can be generated in the not-too-distant future. A bullish MACD cross coinciding with the completion of the consolidation wave will suggest that another impulse wave is in development and that much higher Friday Night stock prices are on the horizon.
I am maintaining my neutral stance on Friday Night stock until I get the necessary indications that will suggest that higher TGIFF stock prices are likely and, therefore, a bullish stance is warranted.