Growlife, Inc. (OTCBB:PHOT) Slips Again
The current state of the marijuana sector of the OTC offers a lot of opportunities for day traders. Volatility is still rampant and stocks shoot up, then tumble downhill just as easily. Growlife, Inc. (OTCBB:PHOT) was one of the companies that got on that roller coaster and are still riding it. Yesterday PHOT moved nearly 50 million shares, closing another 8% down.
By now pretty much everyone interested in marijuana stocks even the slightest should know what got the sector into a frenzy once again. The first recreational sale of marijuana in the state of Colorado on the first day of 2014 made headlines and went down as a noteworthy moment in history. The pot stock sector is well-known for making its biggest moves on hype and it more than delivered once again.
Growlife followed a pattern similar to that of most other tickers associated in any way with marijuana. Wild single-day runs were followed by crashes dragging the price back to where it was before the jump. This sort of movement is hugely unpredictable but it also gives traders with a higher risk tolerance an opportunity to squeeze a few quick bucks out of the swings.
By the looks of things the convulsions rocking the sector are not quite over yet but traders may want to take a quick look at the charts of all marijuana tickers from a year ago. The late January spike that extended up to early March 2013 left many who thought they could play the hype bitterly disappointed and looking at considerable loss. One difference between then and now is that the 2013 mad run was trailblazed by Medical Marijuana, Inc. (OTCMKTS:MJNA) and other companies piggy backed on that.
A very similar situation is unfolding at the moment, except this time around the spark plug was not MJNA or any other single company. Companies such as Cannabis Science, Inc. (OTCMKTS:CBIS), Tranzbyte Corp. (OTCMKTS:ERBB), Hemp, Inc. (OTCMKTS:HEMP), to name a few, are running wild in both directions on the charts. The majority of those moves are not substantiated by any recent material developments or events directly related to their performance but are instead spurred by the newly-sparked green leaf craze.
Unlike many pot stocks, PHOT, at the very least, is coming up with news that are somewhat related to the recreational THC-rich product market. The company announced expediting the launch of its Stealth Grow line of products aimed at assisting marijuana entrepreneurs in, well, growing their own product. With launch scheduled for early Feb 2014, it remains to be seen how Stealth Grow affects PHOT‘s financial bottom line, which was not too pretty as of the company’s latest report. PHOT listed quarterly revenues of over a million but also net loss amounting to $1.8 million.
While a lot of people think they can play the current ebb and flow of the pot stock market and come out dry, this remains a very high-risk field and extensive due diligence is advised, in addition to a stomach for risky trades.
