A Powerful Move in Organigram Stock Is Brewing

OGRMF StockOGRMF Stock: The Organigram Stock Chart Is a Must-See

Let’s not beat around the bush, and agree that 2017 has proven to be a disappointing year for marijuana stocks. Most, if not all, of the investments that capture this space are all negative on the year, and this poor performance is being compounded by the exemplary performance of the equity markets.

Does this mean it is time to throw in the towel on this sector? I wouldn’t go that far, especially given that one particular marijuana stock has really caught my eye. As a technical analyst who bases his investment views on the price action on a company’s stock chart, I must say that I am extremely attracted to Organigram Holdings Inc (CVE:OGI, OTC:OGRMF) stock.

Of all the marijuana stocks I follow, I find the OGRMF stock chart the most compelling at this moment. I am particularly enamored with the technical price pattern that is currently being painted on it.

This technical price pattern is highlighted on the following Organigram stock chart.



Chart courtesy of StockCharts.com

The technical price pattern in question is a “symmetrical triangle.” This pattern is identified by using two converging trend lines, which are created by connecting a series of highs and lows. These trend lines represent levels of price support and price resistance.

Triangles in general are a consolidation pattern that is instrumental in indicating when a directional move in a stock is set to take hold. These patterns are a particular favorite of mine because they are known to generate powerful moves.

The power generated by these triangles is a result of momentum being built and stored within the pattern. Each and every time a level of support and resistance is met, a subsequent bounce or sell-off has ensued. This price action outlines a battle between bulls and bears fighting to get a foothold over the next directional move. A victor in this battle will finally be crowned when the stock price either breaks above resistance or falls below support. Once this occurs, the momentum that is stored within the pattern will finally be released, and a powerful move is expected to follow.

The size and scope of these triangle patterns is directly related to the size and scope of the reaction that occurs once this pattern is finally resolved. The pattern on the Organigram stock chart is now in its 10th month of development, and it can easily continue on this path towards year-end.

The placement of this triangle on the OGRMF stock chart is very significant, as it currently lies right on top of a long-term trend.

The following Organigram stock chart illustrates this predominant and significant trend.


Chart courtesy of StockCharts.com

This chart clearly shows a trend that contains the quintessential characteristic that defines all bullish trends, which is a series of higher highs and higher lows. This characteristic caused the stock price to move from the lower left of the stock chart to the upper right.

Connecting the troughs on the Organigram stock chart using an uptrend line effectively defines this bullish trend. What makes this uptrend line that much more compelling is the number of times the stock price has hit it from above. With that many points of contact, it is not a difficult task to argue that this trend line is indeed significant.

This trend line clearly marks a line in the sand and, as long as Organigram stock is trading above it, I can only assume that a bull market is still in development and that higher stock prices will prevail.

The fact that the symmetrical triangle is developing right above the bullish uptrend line serves to increase the odds that the symmetrical triangle will resolve itself in a bullish manner. This suggests that a powerful move to the upside is now brewing in OGRMF stock.

Analyst Take:

A symmetrical triangle is developing on the Organigram stock chart, which will dictate the next direction this investment is set to take. A triangle is a very powerful price pattern, and upon its completion, a large reaction is expected to occur. The predominant trend on the OGRMF stock chart remains bullish, which increases the odds that symmetrical triangle will resolve itself in a bullish manner. I would wait for the completion of this pattern before taking a position.