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Consumer Staples : Personal Products | Small Cap ValueCompany profile

CCA Industries, Inc. (CCA) manufactures and distributes health and beauty aid products. The Company is engaged in the sale of products in several health-and-beauty aids over-the-counter drug and remedies, and cosmeceutical categories. Under its brand names, the Company markets several different but categorically related products. The Company's principal brand and trademark names include Plus+White (oral health-care products), Sudden Change (skin-care products), Nutra Nail (nail treatments), Bikini Zone (pre and after-shave products), Hair Off (depilatories), Solar Sense (sun-care products), Sunset Cafe (perfumes), Lobe Wonder (ear-care product) and Scar Zone (scar diminishing cream).The Company markets its products to drug, food and mass-merchandise retail chains, warehouse clubs and wholesalers, throughout the United States, and through distributors internationally.

Closing Price
$2.77
Day's Change
0.00 (0.00%)
Bid
--
Ask
--
B/A Size
--
Day's High
--
Day's Low
--
Volume
(Light)
Volume:
0

10-day average volume:
3,066
0

Money flows in marijuana stocks are mostly negative

11:26 am ET August 20, 2019 (MarketWatch)
Print

By Nigam Arora

Short squeezes, which caused stock-price increases, have now ended

When marijuana stocks were rising, many investors got caught up in the excitement and bought large quantities at high prices. Now some are sitting on massive losses. At the same time, another group of investors who paid attention to money flows made significant profits.

Just like a doctor who uses X-rays to see what is going on inside the human body, investors can do X-rays of marijuana stocks. Segmented money flows provide that information. That's what we at The Arora Report use. (For more on this, please see: "How to potentially become a marijuana millionaire, albeit carefully (http://www.marketwatch.com/story/how-to-potentially-become-a-marijuana-millionaire-albeit-carefully-2018-08-27).")

Let's examine the latest money flows in marijuana stocks. Please click here (https://thearorareport.com/chart-money-flows-cannabis-stocks-20191908) for a chart showing segmented money flows in 17 popular marijuana stocks.

Please note the following:

-- Marijuana stocks have pulled back as the short squeezes that were the real reason behind their rise ended. Short squeezes created a lot of artificial buying. When the artificial buying went away, marijuana stocks fell. For example, Tilray (TLRY) ran up to $300 in a short squeeze, and it has now fallen to around $30. The Arora Report gave a signal to short sell Tilray as high as $280. Partial profits have been taken but a very small quantity is still being held. Our zone to buy to cover for Tilray has been $24 to $31.57. The stock is now in the buy-to-cover zone, but the target zone may be further lowered. Investors ought to make a distinction between buying to cover a short position and buying long a new position.

-- As The Arora Report has previously published, smart money flows have been negative in Tilray for a while. Finally momo (momentum) crowd money flows have also turned negative after staying positive through most of the decline in the stock. In plain English, this means that as Tilray fell, the momo crowd continued to buy it and is now beginning to book the losses. In general this is a good development. When the momo crowd has realized all of the losses, then Tilray stock will have a shot of rising again. Note that under the "short squeeze" column in the chart, it says "extremely positive" for Tilray stock. In plain English this means that if a short squeeze starts, it can easily run up Tilray stock again.

-- Canopy Growth (WEED.T) is the blue chip of marijuana stocks. Those who believe in the long-term future of marijuana may consider holding a very small quantity of Canopy Growth in a core marijuana portfolio and then trading around that position with shorter-term trade-around positions.

-- As shown on the chart, smart money flows in Canopy Growth are neutral. The ideal buying opportunity would be if the stock were to go lower and smart money flows turned positive. The low band of our buy zone is $24. However, investors ought to size the position correctly. The recent earnings from Canopy Growth were worse than the whisper and consensus numbers. If it was not a marijuana stock, it would have fallen to $18.

-- Smart money flows are neutral in Aphria (APHA.T), MedMen , Craft Brew Alliance (BREW) and New Age Beverages (NBEV).

-- As the chart shows, smart money flows are mildly negative in Cronos (CRON.T) and Aurora Cannabis (ACB.T).

-- As the chart shows, smart money flows are negative in Curaleaf , Liberty Health and Acreage Holdings .

-- As the chart shows, smart money flows are negative in marijuana ETF (MJ) but momo crowd money flows are positive.

-- Smart money flows are positive in Corbus Pharmaceuticals (CRBP).

-- Smart money flows are negative in GW Pharmaceuticals (GWPH), KushCo Holdings (KSHB), Scotts Miracle-Gro (SMG) and Constellation Brands (STZ).

Read:Wall Street's latest billion-dollar pot company had a half-ton of bad weed returned as it was going public (http://www.marketwatch.com/story/wall-streets-latest-billion-dollar-pot-company-had-a-half-ton-of-bad-weed-returned-as-it-was-going-public-2019-08-16)

Ask Arora: Nigam Arora answers your questions about investing in stocks, ETFs, bonds, gold and silver, oil and currencies. Have a question? Send it to Nigam Arora (mailto:ask-arora@thearorareport.com).

Rankings

The chart shows the relative rankings of the five select popular marijuana stocks. The rankings are based on the six screens of the ZYX Change Method. Please click here (https://thearorareport.com/zyxmethod/) to learn about the six screens.

Risk-adjusted rankings are more useful for medium- and long-term positions. Non-risk-adjusted rankings are more useful for short-term or trade-around positions.

What to do now

The long-term future for marijuana is bright. However, due to short squeezes, pump-and-dump schemes, rapid shifts in sentiment and high volatility, many investors have been losing their shirts. Segmented money flows are the best tool to keep you on the right side of the trade.

Those who believe in the long-term future of marijuana may consider bringing some sophistication to their investing. The foundation of such sophistication is to build small core positions for the very long term and then surround them with shorter-term trade-around positions. It is also important for investors to pay attention to Arora's 14th Law of Investing and Trading: To be successful at investing and trading, become a master of position sizing.

Please also read:

The 'smart' money is telling Canopy Growth investors to be careful (http://www.marketwatch.com/story/the-smart-money-is-telling-canopy-growth-investors-to-be-careful-2019-04-26)

Creeping complacency in marijuana-stock investing is a possible warning sign (http://www.marketwatch.com/story/creeping-complacency-in-marijuana-stock-investing-is-a-possible-warning-sign-2019-03-27)

To invest successfully in marijuana stocks, avoid this one thing (http://www.marketwatch.com/story/to-invest-successfully-in-marijuana-stocks-add-this-pointer-to-your-list-of-things-to-do-2018-10-09)

How to survive marijuana stocks' rollercoaster ride (http://www.marketwatch.com/story/how-to-survive-marijuana-stocks-rollercoaster-ride-2018-09-24)

Tilray is the poster boy of short-squeeze stock candidates -- here's how to find others (http://www.marketwatch.com/story/tilray-is-the-poster-boy-of-short-squeeze-stock-candidates-heres-how-to-find-others-2018-09-19)

Disclosure: Subscribers to The Arora Report (http://thearorareport.com/) may have positions in the securities mentioned in this article or may take positions at any time. Nigam Arora is an investor, engineer and nuclear physicist by background who has founded two Inc. 500 fastest-growing companies. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com (mailto:Nigam@TheAroraReport.com).

-Nigam Arora; 415-439-6400; AskNewswires@dowjones.com

(END) Dow Jones Newswires

August 20, 2019 11:26 ET (15:26 GMT)

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