Hi guys, gals, I just posted this to my blog at Motley Fool, where I am known as MightyMaven. This is an analysis I did this morning on a pretty neat company's stock, of 22nd Century Group. Their symbol on the NYSE is XXII and they have over 200 patents on tobacco and cannabis. The big deal right now is their tobacco patents allow them to produce very low nicotine (VLN) cigarettes, which means you have a cigarette with non-addictive levels of nicotine you can smoke. That means, if you do, that you are more likely than not to start smoking less each day, and when you decide to quit, you are likely to be successful at it. They are the ONLY ones who can produce cigarettes with 95%+ less of the nicotine in competitive cigarettes. They use no chemicals, but have come up with a tobacco to grow that just has that very low level of nicotine. Their VLN tobacco is the one and only being used by the FDA and others in research and clinical trials the number of which has grown dramactically the last two years, all backing up this approach to quitting. Hence, the major announcements by FDA and other world agencies, country agencies, that they are moving to have all cigarettes with this level that's non-addictive. That makes XXII pretty much the go to guy for VLN cigarettes. But read that on their website. This article is about the technical analysis of their stock I did. I hope you enjoy it. Most of you probably haven't heard of the Coppock Curve so you should look that up and learn about it. I was friends with one of Coppock's top people at Trendex. That's how I learned about it.
COPPOCK CURVE:
http://stockcharts.com/h-sc/ui?s=XXII&p=D&yr=1&mn=0&dy=0&id=p52458622816
22nd Century Group has been having a lot of good news you can read about and a very good conference call on top of that. I want to look today just at some technical chart analysis that signal to me this XXII bull has legs and horns.Let's start with the highly regarded Coppock Curve which typically predicts stock trends with a greater than 90% accuracy. Note the uptrending Coppock Curve line which turned bullish in early April 2016. See how the curve has continued to proceed in an upward direction in a very consistent manner? It is continuing upward to date and the last two days turned the angle of ascent sharply higher. This whole aspect of the chart is a long-term bullish signal.
CUP & HANDLE:
Next let's look at the right most two months on the chart, late October through last week. You see a clear cup formed and then you see a clear handle formation. This came as the stock retraced to 59% of its move from $0.89 to $3.50. It failed to move past the Fibonacci level of 61.8 which would have been a signal of further downtrend. But in fact, the steep Fib downtrend was in contradiction to the Coppock Curve. With the Cup & Handle formation coming into play, that confirms the Coppock Curve, and the failed Fib level adds to that confirmation for a bullish scenario. You can see that the rise in the stock Friday and Monday come on the completion of the Cup & Handle formation.
HIGHER HIGHS & LOWS:
Next let's look at the price trend of Higher Hi's and Lo's. Starting with $1.14 high last February and the $0.89 low in March 2016, the Hi-Lo's went to $1.55/1.13, then $1.93/1.33, then $2.84/2.00, then $3.34/2.41, then $3.50. That is nine months of higher highs and higher lows. Again, another very strong bullish signal when looking at what is the current long-term trend. This trend also confirms the Coppock Curve, and the Cup & Handle confirms the Higher Hi-Lo Trend as well.
MOVING AVERAGES:
http://stockcharts.com/h-sc/ui?s=XXII&p=D&yr=1&mn=0&dy=0&id=p10435049645
Finally, we can look at the 10, 20, 50 & 200 day moving averages and the price relative to them. Notice that the stock has been above the 200 day moving average for almost 9 months. The 200 day exponential moving average line is higher than the 200 day simple MA line and it shows the lowest price of the Cup & Handle formation touched base with it, so it retraced to the 200 day EMA. That a key average that's watched in technical analysis, and although my personal opinion is the stock was very oversold in getting to the $1.95, the end result is a very strong Cup & Handle formation as it resolves to the upside. The price is also above the 50 day moving average and the 20 day moving average, in another bullish breakout mode. Furthermore and last of all, the sharply uptrending 10 day moving average is set to breakout through the highest of these averages, the 50 day moving average, probably later this week, which will be a bullish crossover as well.
CONCLUSION:
That's it. You can now check out what's going on with the company from the fundamental side, the news side, and what they and others are saying about them. This analysis would suggest a fairly nice discussion going on in the market. They just hired a bigwig from British American Tobacco to lead their research and development. Something good looks to be going on. Definitely I recommend you follow this company's developments if you have anybody you love that is smoking cigarettes and wants to quit but can't. Research is indicating they have a hard time quitting because the high nicotine keeps them hooked. They also found in multiple studies that patients didn't overcompensate with VLN cigarettes to try to get more. Plus they found that rather than try a gradual reduction in nicotine levels, what worked best for people was to just go straight to the VLN cigarettes right off the bat for the best success rates in quitting the habit. I think that's it. This took me about 4 hours this morning. I hope you guys like it.
Here's the link to my blog, if it's okay to post it here. That's for verification. I'm wondering if I really need to post there as well as here. Just trying to reach a larger audience. I'm thinking I need to put more of my effort over here. Thoughts appreciated. coinmaven.