National Access Cannabis Stock Is Poised for Further Gains

 national access cannabis stock
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NAC Stock: Resistance Currently Resides at $1.20

Marijuana stocks were an easy trade in 2017, as the entire sector made a move toward higher prices as if a rising tide was lifting this entire sector. 2018 has seen the tide go out, and with it, the legal marijuana sector is correcting.

As a result of this correction, I have been doing my best to focus on stocks within the sector that have been showing signs of relative strength, and are bucking the trend. There are not many that fulfill this criteria.

One of these names currently outperforming its peers is National Access Cannabis Corp (OTCMKTS:NACNF, CVE:NAC). As a sign of real relative strength, National Access Cannabis stock has performed extremely well, as it is currently up 68.67% year-to-date. Not many of its peers can say the same. From a technical standpoint, the indications on the company’s stock chart remain in bullish alignment, supporting the notion that NAC stock is poised for further gains.

There is currently a technical price pattern that is in development on the National Access Cannabis stock chart, which will determine which direction the stock is likely to head in next.

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This technical price pattern is highlighted on the following chart.

Chart courtesy of StockCharts.com

The pattern highlighted on the NAC stock chart is an ascending triangle. If you need reminding, that’s a technical price pattern that is characterized by price action which consists of a sequence containing a series of higher lows and a static high. Connecting this series of lows and highs generates two converging trend lines, which define both the pattern and respective levels of price resistance and price support.

As the pattern develops, the range between the two trend lines continues to contract, causing momentum to build as traders position themselves on the side of either support or resistance in anticipation of which way the pattern will be resolved. As a result, triangle patterns are particularly powerful.

This ascending triangle is still in development. Meanwhile, the moving average convergence/divergence (MACD) indicator has just swung to bullish alignment, supporting the notion that a break above resistance is possible.

MACD is an indicator which is used to distinguish whether bullish or bearish momentum is influencing the trading action in a stock. This indicator is very significant because, in a bullish trend, a stock cannot sustain a move toward higher prices unless bullish momentum is supporting it. A bullish resolution of this ascending triangle will continue the bullish trend that began in November 2017.

The following National Access Cannabis stock chart illustrates this bullish trend:

Chart courtesy of StockCharts.com

The bullish trend on the NAC stock chart has been annotated in order to highlight the waves that were responsible for creating it.

Bullish trends like this one are constructive in nature, and therefore are created by a sequence consisting of impulse waves and consolidation waves.

The waves highlighted in green are impulse waves, which are advancing in nature. They define the stage in a bullish trend when the stock price makes a sustained move toward higher prices.

The waves highlighted in purple are consolidation waves, which are corrective in nature. They define the stage in a bullish trend when the stock price corrects and refrains from advancing. This corrective price action, characterized by this wave, is responsible for unwinding overbought conditions and creating the necessary environment so an impulse wave can follow.

The ascending triangle doubles as a consolidation wave and, when resistance—which currently resides at $1.20—is broken, an advancing impulse wave is likely to follow.

The development of an impulse wave is currently being reinforced by the MACD indicator, which is highlighted on the following stock chart using a weekly scale.

Chart courtesy of StockCharts.com

This National Access Cannabis stock chart illustrates that the entire move toward higher stock prices has been supported by a bullish MACD cross, which is a characteristic that very few of its peers currently share. This is a very influential indicator and, as long as it remains in bullish alignment, it continues to support the notion that higher NAC stock prices are in development. This reinforces the notion that an impulse wave is on the horizon.

Analyst Take

A number of indications on the National Access Cannabis stock chart are supporting the notion that investment is still geared toward higher prices. I believe that, once it breaks above resistance at $1.20, another leg toward higher NAC stock prices will commence.