IVITF Stock: A Bullish Trend Is in Development
The sector currently stealing the spotlight is the legal marijuana sector. Ever since news broke on August 15 that Constellation Brands, Inc. (NYSE:STZ) was increasing its ownership stake in Canopy Growth Corp (NYSE:CGC), marijuana stocks have been off to the races.
As a result of this increased enthusiasm for marijuana stocks, I have decided to focus on the cannabis company Invictus MD Strategies Corp (OTCMKTS:IVITF, CVE:GENE). I believe that Invictus MD stock is poised to move along with its peers, and that higher stock prices will prevail.
My beliefs are all technical in nature. As a result, my bullish view was generated by using a number of technical indicators that are currently suggesting that IVITF stock is geared for further gains.
The first technical indication is highlighted on the following chart.
Chart courtesy of StockCharts.com
This Invictus MD stock chart captures a progressive move toward lower prices that began after the stock peaked at $2.76 on January 8.
This price action contained a series of lower highs and lower lows, which is the quintessential characteristic of a bearish trend.
I captured this bearish trend by connecting the peaks created by the price action. The end result is the downtrend line that I have drawn on the chart above.
This downtrend line provides really important information. Not only does it identify that a bearish trend is in development, but it also pinpoints where price resistance resides.
The reason why this is very important information is that the downtrend line acts like a dividing line.
As long as Invictus MD stock was trading below this dividing line, I could only assume that a bearish trend remained in development. In order for me to suggest that the bearish trend had run its course, the stock needed to break above the dividing line.
On August 29, IVITF stock broke above price resistance and was trading on the other side of the dividing line. Finally, an indication to suggest that the bearish trend had come to an end! This opened the door for a bullish trend to follow.
As is always the case, one signal is never enough. Fortunately, the break above the downtrend line was also accompanied by another technical signal.
This technical signal is captured on the following Invictus MD stock chart.
Chart courtesy of StockCharts.com
The bullish signal that accompanied the break above the downtrend line was generated by the moving average convergence/divergence (MACD) indicator.
MACD is a very influential momentum indicator that distinguishes whether bullish or bearish momentum is influencing the price action in a stock. This is pertinent information because a stock cannot sustain a move in either direction unless the applicable level of momentum is supporting it.
Bullish momentum implies that a stock is geared toward higher prices. Bearish momentum implies that a stock is geared toward lower prices. This is why the waves highlighted on the IVITF stock chart above have coincided with the MACD indicator.
These waves are part of a wave structure known to create and sustain bullish trends.
The waves highlighted in green on the chart above are impulse waves. These waves capture the stage in a bullish trend when a stock stages a sustained move toward higher prices.
The wave highlighted in purple is a consolidation wave. It captures the stage in a bullish trend when a stock corrects.
The bearish trend that was highlighted earlier also doubles as a consolidation wave. The break above the downtrend line, coupled with the bullish MACD signal, is suggesting that a sustained move toward higher Invictus MD stock prices is now in development.
I would not be the least bit surprised to see IVITF stock test the $2.00 range in the days and weeks ahead.
I am bullish on Invictus MD stock because a number of technical indications are currently suggesting that the stock is poised for further gains.
As a result, I will maintain a bullish view on IVITF stock until there are indications suggesting that my bullish view is no longer warranted.