The rally isn't actually that surprising. As you might know, FITX announced back in the summer that they want to enter the medical marijuana business and if you have been following the OTC Markets over the last couple of days, you probably know that virtually all the penny stocks in this sector are on the move at the moment, being fueled by the first legal cannabis sales in Colorado.
But while most of the people are watching the business in the Centennial State, FITX are focused on an altogether different geographical region - Canada. As we mentioned yesterday, they announced on Monday that they have received a green light from Health Canada which is supposed to allow them to produce and sell cannabis north of the border. The news was also reported in a Forbes article which triggered an absolute trading frenzy. Indeed, the involvement of a media outlet as influential as Forbes is bound to cause quite a lot of stir among penny stock investors, but will it result in a sustained run in the right direction?
The go-ahead from the Canadian regulatory organ is certainly a positive development and so is the fact that they recently found a building which will be used for the production of medical marijuana. FITX's CEO, Bill Chaaban, also said in the Forbes article that the revenues from the medical pot business will be absolutely huge while the profit margin will almost certainly guarantee a positive bottom line.
These things are all well and good, but the fact of the matter is, at the moment at least, predictions about FITX's future stock performance can be based on nothing more than guesswork. The general brouhaha around the industry is quite intense and it might continue to push marijuana tickers over the coming days. Once it dies down a bit, however, FITX's resilience will be tested.
And the chart for 2013 clearly shows that the ticker has yet to prove itself as a solid performer.
Ultimately, it will all come down to the figures in the future financial statements. If Mr. Chaaban's predictions of massive revenues and profits turn out to be accurate, FITX's shareholders might be in for an interesting ride. If something goes wrong, however, we will most probably see some more drops.
Yet another thing that could wreak havoc with the chart movement is the threat of a paid promotion. Although Jet Life were quick to point out that FITX has been featured in a Forbes article, there doesn't seem to be a paid awareness campaign at the moment. Hopefully, things will stay that way since we've already seen that the stock isn't really that good at coping with the promotional pressure.
Speaking of which, more and more emails are coming in as part of the $2.5 million pump for Tiger Oil and Energy Inc (OTCMKTS:TGRO). Yesterday's session ended with a 1.5% correction for TGRO but a scarier drop could be experienced at any time. Another promotion for an OTC stock, the one for Centor Energy Inc (OTCBB:CNTO), is still in its first days and so far, the ticker is performing admirably. Despite this, the risks are mounting by the minute.