For his second "Executive Decision" segment of Mad Money Thursday evening, Jim Cramer spoke for the first time with Chris Beals, CEO of WM Holdings, the cloud software provider for the cannabis industry. WM Holdings will soon be coming public by a reverse merger with Silver Spike Acquisition (SSPK) , a special purpose acquisition company.
Beals explained that WM Holdings is a marketplace for cannabis goods. The company boasts 10 million monthly active users and providers retailers with a host of services.
Given all of the different regulatory and compliance issues that vary from state to state and locality by locality, the cannabis industry requires specialized solutions and can't take advantage of generic systems, Beals added.
Now let's take a look at the charts of SSPK.
In this daily Japanese candlestick chart of SSPK, below, we do not have a lot of usable price history to work with. Prices have been in an uptrend the past several days and prices have doubled in a very short time. Unsettling.
SSPK is trading above the rising 50-day moving average line and trading at more than twice the level of the slower-to-react 200-day moving average line. This is one measure of being extended or overbought - when prices are at twice the level of the 200-day line.
The On-Balance-Volume (OBV) line shows a slight upward slant. The slow stochastic indicator in the bottom panel is into extreme overbought territory.
In this weeklyy Point and Figure chart of SSPK, below, we can see a potential price target of $28 - not much more on the upside using this charting technique.
Bottom line strategy: Special purpose acquisition companies have been all the rage lately. Maybe it is time for some of them to cool off.
