A few weeks ago I got interviewed by MainStreet.com with my take on marijuana stocks.
I had just made over $50,000 in a few days prior shorting stocks like GRNH/MDBX so I offered some tips:
After a run-up last week, Tim Sykes earned $50,000 short selling marijuana penny stocks MedBox (MDBX) and Green Grown Technologies (GRNH).
“Penny stock investors all made exponential returns on their money within a few days, and then short sellers like me cleaned up when their unsustainable run-ups crashed 40% to 70% within a few days,” said Sykes, a Miami-based entrepreneur, stock trader and penny stock expert.
“Experience teaches me there will be more waves based on breaking sector news in the coming weeks and months,” Sykes told MainStreet.
For example, Advanced Cannabis Solutions (CANN) started the year at $3.25 a share and is now trading at $15.85 a share.
“That’s a 388% increase in two weeks,” Sykes said. “Applying simple technical analysis to buying a marijuana penny stock involves finding those that are breaking out above previous highs to dramatically increase the odds of profits for investors.”
Tips for Short Selling Cannabis Stocks
1. Marijuana stocks don’t rise on fundamentals because the industry is too new for revenues and profits. “Valuation is based on hype and potential,” Sykes said. “The bigger the marijuana-related idea, the bigger the stock spike potential no matter if the company can actually pull it off. It’s the Wild West right now.”
2. Lock in profits by purchasing stocks with specific targets and exit prices. “Once you hit those targets and prices or anything close, take the profits and run,” Sykes said. “Much of it isn’t predictable. I myself aim for 20% to 30% gains per position in one or two days given the volatility.”
3. Vanishing trading volume is an indication of media frenzy wearing off. “Ride the hype but be sure to exit when the momentum even begins to look like it might fade,” said Sykes.
Within days of that MainStreet article I had successfully shorted CANN from the $20s — when it was valued at $270 million — before it crashed to the teens all over the next few days…CANN later hit $60 TODAY!
Long story short, I successfully rode the wave and right now we have a new wave to short…on the sketchiest marijuana stock right now, ZDPY which I NAILED for a buy alert at $14ish a few days ago before it jumped to $28 today (I sold a bitttttttt too early)
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Entry comments: Bought this CANN sympathy play right near multi-day resistance, CANN is up 66% today and this only only 44% and this one has a much lower float/marketcap/less extended chart, goal is to make $2-4/share later today or tomorrow, don’t chase it as it moves quick but executions take a while, hence why I’m buying before the market close, ideally for a morning gap up/morning spike, if it can break 15, it can reallly spike Supernova style but if not I still make $1/share into the top, good risk/reward
Exit comments:Just like disappointing CANN, there’s no gap up/morning spike here, executions takes forever on this one, out for small overall gains between yesterday and today, gotta play it safe
Now at $22/share I’m short overnight as the stock has showed signs of topping and more importantly, there are signs that a major expose is coming out soon as veteran short sellers/exposers are zeroing in on ZDPY’s inconsistencies.
See these 3 telling tweets…and understand LX21 is one of the most successful short sellers I know as you might’ve read HERE
$ZDPY Yahoo says there are 1.47M shares outstanding. Wrong! It's 16.3M!. Market cap is now $400,000,000
— lx21 (@lx21) March 5, 2014
— Fraud Research (@FraudResearch) March 5, 2014
— Fraud Research (@FraudResearch) March 5, 2014
The Fraud Institute kept linking to this legal report with some VERY serious ZDPY issues:
Zoned Properties, Inc. Acquires Real Estate for Key Arizona Medical Marijuana Dispensary
Wall St. Journal: “Zoned Properties, Inc. . . . a lessor of land, facilities, and equipment to the medical marijuana market in Arizona announces that it has closed on all of the real estate associated with the approved site for a medical marijuana dispensary located in Gilbert, Arizona for $1.115 million. The Town of Gilbert has already granted a conditional use permit and approved the design of the property, which is properly zoned for a medical marijuana dispensary.”
A search of deeds filed with the Maricopa County Recorder on February 23, 2014, shows a Warranty Deed and affidavit of property value for a parcel of vacant land acquired by Zoned Properties, Inc., on January 20, 2014, for $300,000. The property is located at 988 South 182nd Place, Gilbert, Arizona.
Query: Why does Zoned Properties, Inc., say it purchased the Gilbert property for $1.115 million when the affidavit of property value states the purchase price was $300,000?
Zoned Properties, Inc., a Nevada corporation, lists its headquarters in Scottsdale, Arizona, but it is not a corporation formed in Arizona or licensed to do business in Arizona. Zoned Properties, Inc., is violating Arizona Revised Statutes Section 10-1501.A, which states “A foreign corporation shall not transact business in this state until it is granted authority to transact business in this state.”
The corporation was formerly named “Vanguard Minerals Corp” until 10-2013, “knewtrino, Inc.” until 10-2007 and “Mongolian Explorations Ltd.” until 5-2006. See its financial statement for the nine month period ending September 30, 2013.
See also “Zoned Properties, Inc. Agrees to Purchase Multi-tenant Light Industrial Park With Licensed Arizona Medical Marijuana Cultivator Tenant,” which states that Zoned Properties, Inc., has a contract to purchase real property in Tempe, Arizona, for $4.6 million.
Zoned Properties, Inc., appears to be a publicly traded company. Marc J. Brannigan is the President & CEO and Charles Randall is the COO.
So I’m writing this post to help you understand why ZDPY will likely crash later this week and definitely next week…are they operating illegally…why are there discrepancies related to the property?
I hope The Fraud Institute or someone else writes a Seeking Alpha article exposing this stuff and if and when they do, this stock will definitely crash FAST…remember just 2 months ago this stock was trading at 67 cents/share.
Even if there is no article/expose, ZDPY is a sympathy play to CANN which also showed signs of topping today and shorts are licking their lips…look for some morning panics on both in the next day…if you can’t find shares to short, definitely be on the lookout for dip buying opportunities.