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3 Ways To Play The Smoking Hot Cannabis Sector 🔥

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Written by Timothy Sykes
Updated 9/11/2023 6 min read

Before AI and EVs took center stage, the cannabis sector was the talk of the town.

Up until last week, pot stocks were more or less dead.

But they’ve made a roaring comeback.

In fact, several of my students, including myself, jumped into some promising trades yesterday.

And while we saw massive moves in symbols like ACB and CGC, there’s reason to believe the rally has legs.

So…let me share three strategies to help you take advantage of this revitalized sector.

Are Weed Stocks Back?

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Here’s the background information, which started getting attention on August 30th.

  • Biden administration reviews federal marijuana treatment.
  • The federal agency is considering rescheduling marijuana to a lower level.
  • Potential effects include changes in taxation, interstate commerce, and research.
  • Department of Health and Human Services (HHS) prompts the Drug Enforcement Agency (DEA) to review marijuana’s classification.
  • Marijuana is currently categorized as Schedule I; DEA might move it to Schedule III.
  • Rescheduling could ease business tax burdens and allow interstate commerce.
  • Banking services for the industry won’t be automatically available post-rescheduling.
  • SAFE Act in Congress might address banking issues.
  • Senate Majority Leader Chuck Schumer emphasizes the goal of ending federal prohibition.

Then there was this tweet last week that sparked a nice little rally in some pot stocks…

I love this kind of setup…

A known catalyst is on the way.

It’s sort of how my weekend strategy works. 

Yesterday, we saw NICE squeezes in CGC, ACB, SNDL, TLRY, and CRON ticker symbols.

3 Ways To Play The Potential Rally In Cannabis Stocks

#1 Panic Dip Buying

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This has been my favorite way to play short-squeeze stocks this year. It becomes trickier when trading cannabis stocks because most are heavily diluted. In other words, they have a ton of outstanding shares compared to low floats, which are easier to squeeze.

Nonetheless, there is a potential catalyst in the works.

And it appears traders are trying to get ahead of the news, causing pot stocks to catch a bid.

I’ll be looking at potential dip buy opportunities throughout the week.

#2 Sympathy Plays

Since this is sector-related news and not stock-specific, there might be an opportunity for some sympathy plays.

A sympathy play refers to a situation where one company’s stock moves in response to the price action of another related company. This typically happens to companies within the same sector or industry.

For example, yesterday’s leaders were ACB, with the stock up over 70% at one point…and CGC, up over 56%.

I didn’t trade either of those. Instead, I looked at a sympathy play in the TLRY ticker.

Source: Profit.ly 

If you put together a watchlist of stocks in the sector, you can see which one is leading and lagging. If we see strength, we can buy the weakest performer and hope it catches up.

#3 Momentum Breakout 

First, always hunt for those big, meaningful breakouts. I’m talking about stocks that tease resistance for days but then blast through a key level.

That’s where the magic happens.

Don’t get caught just playing one tune – diversify your knowledge!

Know your patterns, whether it’s the morning panic dip buys, multi-day breakouts, or those juicy OTCs popping with news and volume.

However, don’t get greedy!

Stick to what you know best. Trade smart, not hard – that means capturing the action in the morning or afternoon and avoiding those midday fakeouts.

When you spot a breakout, make sure it’s a solid, no-nonsense move, like when breaking news hits or a stock bulldozes a crucial level.

Lastly, always have an escape plan. Sell into strength offload when everyone else is diving in.

This way, you’ll bank more profits and keep those risks at bay.

Remember, trading’s not just about playing the game. It’s about playing it smart!

How Are My Students Playing Pot Stocks?

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Are you curious about the strategies my top students are employing right now?

Look, trading isn’t just about the stocks; it’s about timing, understanding the sector nuances, and, most critically, the strategies behind each play.

Here’s the insider scoop: Successful trading in this sector is not purely based on luck or gut feelings.

It’s a blend of experience, expertise, and real-time market analysis.

The question is, do you want a piece of that knowledge?

That’s where our live training workshops step in. 

Together, we’ll break down the current cannabis sector plays, analyze the hottest trades, and arm you with tactics that have been proven time and time again.

The cherry on top? This wealth of information is yours to grab, absolutely free.

Your part?

Just come with an eagerness to learn and a passion to up your trading game.

Ready to unlock the secrets of trading the cannabis sector effectively?

[CLICK HERE TO SECURE YOUR SPOT IN OUR NEXT LIVE TRAINING.]

Your next big trade could be just around the corner.

Don’t miss out!


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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”