22nd Century Group (Nasdaq: XXII) is a leading plant biotechnology company focused on technologies that alter the level of nicotine in tobacco plants and the level of cannabinoids in hemp/cannabis plants through genetic engineering, gene editing, and modern plant breeding. In fact, this cannabis biotech company appears to have a growing case both fundamentally and technically speaking – but is 22nd Century cannabis stock a buy and hold?
Related: Why is 22nd Century Stock a Strong Buy?
As you know, Cannin’s Cannabis Stock Portfolios track large, mid-tier and small cap cannabis stocks. These include MSOs (multi-state operators) as well as other other little-known, up-and-coming contenders with near to medium term potential. Our team of experts are constantly evaluating and rebalancing these portfolios for maximum gains. Let’s take a look at the technicals to see if 22nd Century cannabis stock is a buy and hold:
Is 22nd Century Cannabis Stock a Buy and Hold? What are the Technicals telling us?
Pictured above is our long term weekly log chart of XXII. Notice the substantial trading range from $6.00 – $0.57. Note the strong volume surge of sellers in the week of April 26th 2021. This was the largest weekly volume bar in years. Volume has been picking up since the end of 2020 and we interpret the large weekly volume bar of April 2021 as long positions that accumulated in late 2020 to early 2021.
Related: 22nd Century Poised for Breakout
XXII could potentially head towards a range trade for the next few months as it has in the past (late 2017 and mid 2019). See the rectangle above. The range broke to the downside which has been quickly recovered in the last year due to improving fundamentals and improving industry standards. XXII is well positioned to capitalize on these. Both charts and fundamentals hint at higher prices. Although we would like to see volume pick up again as prices rally — otherwise the stock will likely trade sideways for a bit. But is 22nd Century a buy and hold?
22nd Century: Where was this stock 2 weeks ago? What are the Technicals Telling Us?
Notice that buyers showed up in the fall of 2020 and a rally from below 63 cents to a high of pretty much $3 in a couple of months time. This type of strong buying impulse is important because of almost always green weekly bars. In this strong up leg — there was 13 total weekly bars with only 2 weekly bars that were red.
Related: 22nd Century Group Provides Business Update
This type of px action is a pure breakout/trend change px action. Once a market shows a clear trend, it tends to develop into a parallel channel or a trading channel that continues to drift to a mathematical measured move target. Although It seems overly simplistic, the mathematical nature of markets holds up over time.
Simply based on a projected move…this stock could hit $15+ in the coming year as the first target. I think it ultimately goes much higher if we look at the monthly charts. This week ending August 28th, 2021 was a quality green weekly bar. Opening up more upside for this stock to keep trading higher.
22nd Century: Is this Cannabis Stock a Buy and Hold?
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