There continue to be some very strong pockets for trading in small caps and I'm looking hard for stocks that aren't extended which I can buy aggressively. One name I've mentioned before is Village Farms (VFF) . It is moving today on good volume and I've been a buyer.
VFF has been an ordinary greenhouse operator for years and has been one of the largest suppliers of tomatoes, bell peppers, and cucumbers. It was not a very exciting business until it entered into a joint venture with Emerald Health Therapeutics (EMHTF) . VFF provided the greenhouses and Emerald provided the knowledge of how to grow cannabis.
In November, VFF acquitted 100% of this joint venture known as Pure Sunfarms. The company has over 10 million square feet of greenhouse space in North America and is well-positioned in the U.S. to provide cannabis as new laws come into play.
The company has entered into several supply agreements and announced last week that it is now offering 'gummy-infused' products.
After completion of the Pure Sunfarms deal, Raymond James raised the stock to 'strong buy' and gave it a $20 target.
Technically the stock has been correcting in a 'falling wedge' for several weeks and is moving over the downtrend line today on big volume. The stock is not extended and looks set to challenge recent highs around $11.60.