For Patient Longs, Green Organic Could See a Lot More 'Green'

The Green Organic Dutchman Holdings Ltd. (TGODF) has enough trading history to draw some conclusions from the charts and indicators. It hasn't topped the attention that Tilray (TLRY) has drawn but I think we can see some dramatic percentage gains from this name in the months ahead.

Let's review a couple of charts.

In this daily bar chart of TGODF, below, we can see an initial run-up from around $2 to $7.50, followed by a correction down to around $4 where buyers came in.

Prices turned higher by late August with prices crossing above the 50-day moving average line with the slope of the line turning positive this month.

The daily On-Balance-Volume (OBV) line did not decline much in July and August when prices corrected - this suggests that earlier buyers held their positions. In September the OBV turns up sharply to tell us that buyers are now very aggressive.

The trend-following Moving Average Convergence Divergence (MACD) oscillator gave an outright go long signal in late August - before the media attention on this sector.

In this limited Point and Figure chart of TGODF, below, we are plotting every $.50 swing in the stock. This cuts down on the "noise" and lets us see some of the intra-day jiggles.

Buyers have been coming in at higher and higher lows. There is a double top at $7.50 and a trade at $8.00 will be an important upside breakout. An upside breakout at $8.00 should open the way to a longer-term rally to around $19 or so.

In this "hot environment" for pot stocks $19 might just be a resting point in a bigger rally.

Bottom line strategy: Looking to go long TGODF? Try going long around/near $7.00 and add aggressively above $8.00. Risk a close below $5.00 for now.

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