Anticipating the Next Surge in Supreme Cannabis Stock

Supreme Cannabis Stock

If the FIRE Stock Trend Is Still Bullish, the Correction Has Likely Run its Course

Marijuana legalization is slated for July in Canada, and every day that passes is one day closer to that milestone date. Legalization and prospects of a recreational market is what’s currently fueling speculation in this sector, and it has been responsible for spectacular gains late last year and early this year.

This speculation reached fever pitch in early January, and the sector has been in a correction ever since. Corrections such as this can be painful, and the recent pullback is a testament to this. As an investor, I have learned long ago that corrections are a necessary part of every bullish trend, and that, as long as the bullish trend is still intact, corrections should be embraced rather than feared.

I have the inclination to believe that the recent sell-off in Supreme Cannabis Company Inc (OTCMKTS:SPRWF, CVE:FIRE) stock was a much-needed correction in a bullish trend, and that the FIRE stock correction has already run its course.

This notion is best illustrated using the following Supreme Cannabis stock chart.

Supreme Cannabis stock chart

Chart courtesy of

This stock chart effectively captures the bullish trend in FIRE stock that began in July 2017.

This bullish trend contains the quintessential characteristic that defines all bullish trends, a price chart consisting of a stair-step pattern that was created by a sequence of higher highs and higher lows.

By connecting the series of higher lows, I have created an uptrend line which captures this bullish trend and defines an influential level of price support. Using the uptrend line as a tool is quite easy. As long as FIRE stock continues to trade above the uptrend line, the bullish trend is still intact and I can only assume that higher stock prices will prevail.

Every time this uptrend line has been tested, buyers have come in to support it. The recent correction for Supreme Cannabis stock has been no exception. This test of price support is why I currently believe that the correction in FIRE stock has likely run its course. If its bullish trend is set to continue, it’s only a matter of time before the stock price regains its footing and stages another move higher.

In order to confirm that higher prices are once again developing, I will be watching the technical indications that have been highlighted on the following stock chart.

Supreme Cannabis price chart

Chart courtesy of

This FIRE stock chart captures the current correction that has gripped this stock.

In order to confirm the notion that higher stock prices are again in development, I am watching a key level of price resistance and an influential momentum indicator.

The key level of price resistance is the downtrend line, and it was created by connecting the series of lower highs that defined this current correction. There have been a number of attempts to move beyond it, and every attempt has been stopped. In order to confirm that the correction is complete and that higher stock prices are on the horizon, Supreme Cannabis stock needs to break above this downtrend line.

A break above the downtrend line will likely coincide with a bullish signal from the moving average convergence/divergence (MACD) indicator.

MACD is a trend-following momentum indicator that uses the crossing of a signal line in order to distinguish whether bullish or bearish momentum is influencing the price action in a stock. The information provided by this indicator is very significant because a stock cannot sustain a move in either direction unless the appreciable momentum is supporting it.

In late December, a bullish MACD cross was generated and, in the days that followed, Supreme Cannabis stock appreciated to the tune of 66.66%, which is a testament to the significance of both this indicator and the influence of momentum.

In early January, a bearish MACD cross was generated, implying that bearish momentum was carving out a path of least resistance that was toward lower prices, which confirmed the notion that a correction was, and currently is, still in development.

The signal lines that created this indication are still in bearish alignment, but they are converging. The generation of a bullish MACD cross will again imply that bullish momentum is influencing the trading action in FIRE stock. I believe that such a signal will coincide with a break above resistance outlined by the downtrend line, suggesting that higher Supreme Cannabis stock prices are on the horizon.

Analyst Take

I believe that the current correction on the Supreme Cannabis stock has run its course, and I am watching a number of technical indications on the FIRE stock chart that will confirm the notion that higher stock prices are ready to prevail again.