Chart of the Day: GW Pharmaceuticals

Gaps through the 50 day moving average are normally great momentum indicators. This is especially the case when a stock or market is towards the lower end of the range. In the case of GW Pharma we have a mid-range version of the genre.

GW Pharma (GWP): 770p Trendline Target

It may be said that as far as the drugs sector, there is nothing more intriguing than a combination of what is legal, and what continues to be a legal infringement. But it can be said that as far as shares of GW Pharma have been concerned in the recent past we have been looking at a variation of the “Don’t get mad, get even” which on the stock market is “Don’t get mad, buy the shares”. This occurs where you have an unpopular company such as British Gas owner Centrica (CNA), or British Telecom owner, BT Group (BT.A). However, in the case of marijuana based epilepsy group GW Pharma it could be argued that we should be assuming, “Don’t get high, get long.” This is especially the case given the latest developments where the group looks to be in play as a takeover candidate. The latest unfilled gap to the upside through the 50 day moving average now at 569p. The view is that provided there is no end of day close back below this feature the upside here should be as great as the March rising trend channel top at 770p. This may be expected as soon as the end of next month.