Member @murphydoc inquired as to whether or not the new cannabis stock etf, MJX (ETFMG Alternative Harvest ETF), looked like a buy at current levels. At first glance of the chart, I immediately noted some fairly well-defined support & resistance levels as well as potential negative divergences building between prices & the momentum indicators on the daily time frame. Not being familiar with MJX, I did a web search & discovered the following (my reply to @murphydoc copied & pasted below):
Q: Is MJX a marijuana ETF? Do you think that is a buy?
A: I wasn’t aware of that one but yes, MJX is a new cannabis ETF that trades on a US exchange. Although I can render an opinion on the chart, which I’ve pasted below, any use of TA in an attempt to ascertain where prices might be headed would be a mistake.
Although MJX was only launched on Tuesday, the ETF company decided to “re-task” an existing ETF from high-yielding latin american real estate to marijuana. As such, the history (past candlesticks) that you see when looking at this chart represents the past price action of a completely different basket of stocks. Therefore, any technical analysis on MJX until it has established at least a few months of trading history with the new basket of marijuana stocks, is useless & will provide a grossly inaccurate analysis of this ETF.
Here are a few links: https://www.benzinga.com/trading-ideas/long-ideas/17/12/10955919/the-first-us-listed-marijuana-etf-ignites-today
MJX daily Dec 27th