PreMarket Prep Recap For March 29: The Forecast On Marijuana And Small Bank Stocks

Did you miss today's PreMarket Prep? Here are some of the highlights from the show.

Key Technical Levels

The following are some of the stocks discussed on the show for which co-host Joel Elconin offered technical levels.

  • General Motors Company GM needs to stay green above the close of $35.56 to challenge Tuesday's high of $36.25. If it can clear that level, there's likely more sellers at the March 20 high of $36.45.
  • Apple Inc. AAPL already made a new all-time high above Tuesday's high to 144.20. It needs to stay above the close of $143.80 and hold in the $144 handle for the rally to continue. There's limited support until former resistance, now support, at $142.80.
  • Sears Holding Corp SHLD has reached a new high for 2017. Shorts are getting smoked. The December 9 high was $12.58, and if it reverses, $11.30 is key. 
  • RH RH rallied off a higher open and failed at $44.00, which matches the May 2 high. It's now back down through opening print of $43.40. It's found some intraday support at $41.57.

How The Marijuana Sector Is Doing In 2017

Alan Brochstein, author of and founding partner of 420 Investor, gave us an update on the marijuana sector. Brochstein recently spoke on a panel at the Institutional Capital And Cannabis Conference, where he noted there's a lot of institutional interest in the space, but it's mostly confined to real estate right now.

"There’s billions and billions of dollars worth of cannabis production facilities and dispensaries across the country, and this industry is starved for capital. A lot of times these business own their property, or they’d like to buy it but they cant so they’ll turn to these third parties."

Brochstein also addressed the political headwinds facing marijuana legalization.

"I think big picture nothing has really changed," he said. "The administration has their hands full with other things. This whole idea of cracking down on the cannabis industry, it’s not really looking like that’s what they’re going to do. They’re looking at people breaking federal law and state law. That’s a nuance a lot of people haven’t picked up on yet."

As far as stocks, Brochstein addressed GrowGeneration Corp GRWG, Kush Bottles Inc KSHB and Eco Science Solutions Inc ESSI, which he called "a joke of a company." To listen to the full interview with Brochstein, click here.

Under The Radar Bank Stocks

Tim Melvin, author of Banking On Profit, joined the show to discuss his favorite small bank stocks.

Melvin said he's bought BankUnited BKU in his portfolio, and he's waiting for it to "get ridiculous."

"If you’re a little more growth oriented, this is not a bad pick."

As far as regulation, Melvin doesn't see it having a big impact on the big banks.

"The big banks' regulatory picture is not going to change much at all. It's at the smaller community bank levels where this can really make a difference."

According to Melvin, tax reform is already priced into a lot of bank stocks, the result of the huge moves we saw in November and December. Melvin said he expects the sector to get hit once a lot of this "hot money" leaves the sector. To protect himself, he put on a hedge in his portfolio for the first time since 2007.

"These guys aren't going to hang around," he said. "As soon as these things stop going up they're going to pile back out the door. I don't want to get hurt by that." Listen to the full interview with Melvin here.

How To Listen And Watch

PreMarket Prep is a daily trading ideas show with a focus on premarket volatility and technical setups. You can listen live and chat with our hosts, guests, and listeners every morning from 8-9 a.m. ET here or on YouTube Live. You can listen to the podcast on iTunes, Soundcloud and Sticher. The full recording of today's show is available below.

Posted In: TechnicalsMarketsTrading IdeasReviewsInterviewGeneralAlan BrochsteinJoel ElconinPreMarket PrepTim Melvin