Origin House (fka ORHOF)

[CornellEngineer]

You know by now that I am pretty bearish on the MJ sector as a whole and am not a big believer in buying and holding any of them over the long haul right now. I am sure there will be a few big winners but I'm not smart enough to pick them. If someone held a gun to my head and forced me to choose I would probably pick 3 or 4 of the US-based stocks since I think they are undervalued relative to the Canadian ones and have a much bigger potential market and therefore a much bigger potential upside. Origin House would definitely be on that list as well as possibly iAnthus assuming their acquisition of MPX goes through. A couple others I've looked at a little that I have considered swing trading but haven't yet is Charlotte's Web and Trulieve. I've also read good things about Liberty Health but they may be a bit overvalued right now. While I like to buy and sell these pot stocks frequently I still prefer to only trade those that I believe have good long-term potential and are "undervalued" at least compared to other MJ stocks.

At the risk of boring the crap outta you, here is what I've learned since I started swing trading these pot stocks that may help you a little if you decide to give it a go. Whenever you enter a trade it is pretty important to have realistic expectations of what kind of returns you can reasonably expect if it goes well and much of that depends on how the individual stock has been trending at the time...as well as how the sector it's in has been faring lately (which is especially important for these MJ stocks since many of them often go up and down together). If you don't have a good grasp on what a realistic % target is going in then you also won't have a decent idea when a good time might be for getting out.

Over just the last 3 months alone the marijuana sector has experienced practically the entire gamut of possible market conditions. Starting in mid-August with the Canopy-Constellation deal we had a huge runup that lasted for almost a month...followed by about a month of mostly sideways trading...followed by a sector-wide crash that lasted a couple weeks...followed by a partial rebound that lasted between a week or two...and now we seem to be in a retracement period for the last week or so. That just about covers it all! Based on the trades I've made over most of this period I have established some rough guidelines (subject to change) of what the typical gains I think I can reasonably expect assuming no major screwups on my part (which is always just 1 mouse click away)...

Trending Upward: 20-30%
Trending Flat: 10-20%
Trending Downward: 0-10%

When I say downtrend I mean a relatively shallow decline in average prices over time...in a severe selloff like we saw in late October it woulda been almost impossible for even the best swing traders to have consistently made any profits and avoid losses. Note that the above is trading from the long side only like I do...if you like to short stocks then that opens up a whole new realm of possibilities and opportunities. The above goals are mine only based on my own personal experience to date...a smarter trader than I am with sharper TA skills and timing than I possess would very likely be able to do better than that but I'll be more than satisfied with the above if it continues. So far the majority of my trades have been in the 15-20% gain range with a couple small losers and a few big winners but most of these trades were back when all these pot stocks were basically trading flat.

I'm not fully convinced this sector has hit a double bottom yet like that one chart you posted the other day might have indicated...not 100% certain but I think the MJ sector may be in an overall downtrend right now so I am lowering my expectations to the bottom category accordingly and won't be terribly surprised if some of my current and near-future trades end up as losers. IMO, this may not be the best time to be swing trading pot stocks...at least from only the long side as I do. I typically only have maybe 1 or 2 open positions going at a time now instead of the half dozen or so that I sometimes had all open at once back when market conditions were more neutral than negative. If I were you I'd either hold off altogether (no fun in that!) or paper trade for a while (boring as hell!) or only trade small positions until things look more positive just to get your feet wet without losing an arm and a leg in the process.

After doubling down on Origin House early Thursday morning we're currently up very slightly on ORHOF...not sure if I wanna be in this stock or outta it when they announce earnings at the end of the month. I've been fortunate enough at this point to have avoided any really big losers and would like to keep it that way if at all possible...LOL. Any thoughts on that?