The House of Health committee just approved a legislation that would allow people with a qualifying medical condition the ability to purchase medical marijuana after obtaining a recommendation from a doctor. The medical marijuana bill, if passed in the House of Representatives, would allow marijuana in pill, skin patches and cream form.  This week we dig into cannabis stocks before the bill heads to a key house vote.

One of the most active cannabis exchange traded funds is the ETFMG Alternative Harvest ETF (MJ: NYSE), an exchange traded fund investors can buy if they want broad exposure to the cannabis market. The fund tracks companies that are likely to benefit from the increasing global acceptance of various uses of the cannabis plant. The fund has gained an impressive 46% YTD. Is there still room for some of these cannabis stocks to grow?

Using Multi-Stock Trading LLC’s “Technical Insight” screener I screened for U.S. listed Cannabis stocks that are indicating any type of bullish technical pattern.

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Cara Therapeutics (CARA: NASDAQ), a clinical-stage biopharmaceutical company, Cara's involvement in the cannabis market relates to its preclinical research involving CR701, a cannabinoid receptor agonist that's designed to treat chronic pain. The stock has soared over 88% year to date and ranks 12 out of 540 stocks in the Biotech sector based on price performance.

A bullish Gap Up was confirmed, Gaps usually represent important areas of support or resistance. A Gap Up will indicate different situations based on the context in which it was formed. A Gap Up in an uptrend may indicate a previous level of resistance has been broken and now forms a support level.

Canopy Growth (CGC: NASDAQ), a diversified cannabis and cannabinoid-based consumer product company is under pressure after recently announcing the acquisition of the Supreme Cannabis Company. The stock is up just over 10% YTD after giving up over 50% from its YTD high and ranks 24 out of 97 stocks in the Drug Manufacturing sector in terms of performance. Multi-Stock Trading LLC’s “Technical Insight” screener has identified a “top Wedge” bearish pattern formation.

A Top Triangle shows two converging trendlines as prices reach lower highs and higher (or stable) lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks down below the lower trendline with a noticeable increase in volume, confirming this bearish pattern as a reversal of the prior uptrend. Let’s see if the stock can hold onto support at its 200-day moving average.

‍Tilray Inc (TLRY: NASDAQ), a pharmaceutical company that develops cannabis based medicines just announced the acquisition of Aphria (APHA: NASDAQ) for just over 2.5 billion dollars. The deal is expected to close at the end of June pending approval of all stockholders and customary closing conditions. The stock confirmed a bullish Engulfing Line.

Following a clear downtrend, we see two candlesticks where the white real body of the second completely envelops the black real body of the first, showing that the bulls have taken over from the bears. A possible support level may be forming near the $16 price level.

Speaking of Aphria (APHA: NASDAQ) an Engulfing Line was also identified with support seen near $13.00.

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Multi-Stock Trading LLC’s “Technical Insight” screener helps traders identify new technical opportunities that are bullish or bearish for those looking to get long or short. The software can also be used as a risk management tool to alert you regarding bearish events happening in your portfolio.

Gary Christie is head of North American research at Multi-Stock Trading LLC in Ottawa.