Cresus: There are basically only two things which move a stock...….up OR down. Those two things are fundamentals and sentiment.
Let's discuss the latter, first.
SENTIMENT: This is the one which is almost impossible to know. We trade in a sector which has been so out of favor for the past 18 months......and almost entirely because of sentiment. Investors just didn't want anything to do with Cannabis stocks. ALL of them got crushed. Big and small alike, they all got killed. Why? Because of sentiment. Prior to that however, sentiment took these stocks to ridiculous valuations. EVERYBODY wanted into this new frontier. Sentiment is fickle.
FUNDAMENTALS: While sentiment can be described as an irrational and emotional lover, fundamentals on the other hand are rational and fact based. Fundamentals (things like earnings, growth, cash-on-hand, management etc.) tell a story which is completely devoid of emotion.
So......you have asked the question as to whether the stock will experience a pull back. My take is: it may. But such a pull back would be a result of sentiment, not fundamentals.
The fundamentals of the company have never, ever been stronger than they are right now. That of course would indicate an escalating PPS.....just as we have experienced over the past six months. That rise in valuation is almost entirely because of improving fundamentals.
Buying or selling any stock based upon sentiment is risky......because sentiment is fickle. Buying or selling based upon fundamentals is a much wiser...….and generally safer way to invest.
