Bulls Are Sleeping on This Aphria Inc Rally

On Friday, the U.S. Labor Bureau reported that 266,000 payrolls were added in November.

Equities shot upwards as the market celebrated the news.

Today, stocks traded “flat”, kept at bay by impeachment proceedings and a rapidly approaching tariff deadline.

That’s right, on December 15th, if the U.S. and China don’t secure a phase one trade deal, President Trump will authorize tariffs on $150 billion worth of Chinese goods.

Economists and analysts alike predicted that the Friday jobs report would be weak, signaling a need to end the trade war.

Now, after investors learned unemployment hit a 50-year low, it appears as though the U.S. is more than ready for the “championship rounds” of the trade war.

Meanwhile, China continues to crumble.

That puts both bulls and U.S. trade representatives in a tough spot. If the economy is truly as strong as recent reports suggest, then Trump has every reason to skewer Beijing further. CEOs see 2020 as another year of big growth.

That might mean it’s time for Washington to twist the knife.

And while that would certainly put China in an even worse spot, it could also derail the current bull run revival. Stocks sunk last week after Trump suggested that a trade deal might not happen until after the 2020 election.

Then, the November jobs report arrived and sent the market back to the top.

No matter how you slice it, it’s going to be a tense week for investors.

Thankfully, some stocks are less correlated with the movement of the general market, meaning that it (mostly) doesn’t matter what happens on the 15th. Better yet, a few of them – like Aphria Inc (NYSE: APHA) – look ready to rally, after selling-off for most of the year.

In the weekly candlestick chart above, you can see that APHA has had a rough 2019. The stock did well until March, where it stalled before dropping steadily.

Now, after spending almost two months straddling the lower Bollinger Band (BB), APHA has “popped” out of its minor downtrend. The current weekly candlestick is trading above the last three candle bodies, and with a weekly close above the yellow trendline, it might make sense to go long above this week’s high. If APHA closes with the same weekly high on Friday, you’d want a trade trigger of $5.30.

Normally, going long on a stock that’s sold-off for almost an entire year wouldn’t make sense. But in this case, APHA just set a double bottom – a trend reversal indicator – on a line of key support.

It wouldn’t surprise me at all to see this stock have a great early-2020 run as a result.

So, next week, check and see how the current APHA weekly candlestick performed. If it managed to close green, APHA could be worth a shot moving forward.


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