There is no obvious positive catalyst this morning but that may be part of the reason that the market continues to trend higher. If there was positive news it would be a good excuse to take some profits but since there is nothing specific there isn't much choice but to stay with the uptrend until something changes.
The FAANG names are doing well this morning, small caps are better and breadth is very strong as it approaches 3 to 1 positive, but the most interesting action is in the cannabis sector this morning.
The big news that is Aurora Cannabis (ACB) has brought in deal maker Nelson Peltz as an advisor. This is an obvious signal that the company is looking for acquisitions and the CEO specifically mentioned consumer packaged goods, beverages, cosmetics and wellness.
The timing of the announcement was fortuitous as ACB has been developing a very attractive chart as it attempted to break over resistance at the $8.25 area. I have a position and will be adding more shares today as the intraday pattern develops. This should be a top 'go to' name in the group whenever there is a new headline.
Despite the attractive ACB story my favorite name in the cannabis sector continues to be Pyxus (PYX) (see Tim Collins trade idea here). It has just about doubled since I named it as my Stock of the Week on February 2, but it still looks to be the best value in the group. PYX has primarily been a tobacco grower and is now using its expertise to expand into hemp and cannabis.
Themes like cannabis tend to persist longer than many think they will. The group will go through some ebb and flow as it develops but if you focus on a few quality names like PYX and ACB you will be able to catch the bulk of the action.
Outside of the pot group there continues to be some very good action in individual stocks. The gold stocks continue to move and Agnico Eagle Mines (AEM) , which I mentioned yesterday, is building on its breakout. There are over 200 new 12-month highs so there are plenty of pockets of momentum.
Aurora Cannabis is a holding in TheStreet's Stocks Under $10 portfolio. Click here to learn more about this portfolio, trading ideas and market commentary product.
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