Looking at the charts of the Psychedelics sector, they can best be described as a mixed bag. Just like Cannabis, shroom stocks are taking a hit. This could just be an overall move out of small caps. Stock Markets are shaky, and the Russell 2000 is looking to find some support. Not happening as of now, and if it continues to decline, I believe the small caps follow.

As we look at a few charts, keep this in mind: if the Russell can bounce from this level, small cap stocks will rise with it. Stock Markets overall would catch a bid, and money would flow back into risk on versus risk off assets.

I am a fan of psychedelics. I know Cannabis and CBD has its perks, but I guess partly, I just didn’t like the small. This year, I began microdosing. It is sort of a thing for traders now, and those that want just a little bit more. I would even go as far to say there is a bit of an occult feel to it all. For more on that stuff I highly suggest you read about the Gnostics, and a recent book titled “The Immortality Key” by Brian Muraresku. A book about a secret religion based on psychedelic experiences and how the Church wanted to cover it all up. To wet your appetite a bit: picture the Holy Grail, but invert the bowl part and you get the shape of a mushroom.

While microdosing on shrooms, I feel the difference. The positivity, the optimism, the focus. I feel like I can take on the world, and am fully functional. You really need to feel and experience this to understand why psychedelics will have a major impact on wellness, well being, and mental health in the future. Science backs this up. Bullish for the long term.

Keep the long term in mind as we delve into these charts. They present some good dip buy opportunities.

Here in Canada, we have the PSYK ETF. Not looking too good. New all time record lows printed on the 23rd of November. We really need to close back above $6.50 to shift back to a bullish stance.

On the US side, PSIL also printed new record lows. Some bid up though to halve the losses. For PSIL, we need a higher close. A close above $8.60 to change my stance. Alternatively, for both of these ETFs, we can wait for basing. Buying this is akin to catching a falling knife. The prudent thing would be to wait for a close above my levels OR wait for prices to base and form a range. This would indicate a bottom is in. This can be applied to other set ups.

Before we look at a few companies, I want to quickly point out the MindMed chart. I do this because they are the poster boy for this space. A big breakdown close on the 23rd of November. If price does not reverse and close back above shortly, then we will fall to the $2.00 zone. Which could mean more pain for Psychedelics.

 

MYND Life Sciences (MYND.CN)

MYND Life Sciences Inc. is a medical biotech drug research and development company focused on neuro-pharmaceutical and novel psilocybin drug development, diagnostics and vaccines. The Company is advancing pharmaceuticals through rigorous science and clinical trials, while diligently patenting and safeguarding its intellectual property. They have an existing Health Canada license which the company firmly believes will result in a significant competitive advantage in the emerging field of psychedelic therapies.

Chart wise, we broke below a major support to create new record lows. New lows might still be in the cards if we break below $0.50. The positive news is $0.50 tends to be a major support zone for stocks under $1.00.

 

Mind Cure Health (MCUR.CN)

Mind Cure Health is a life sciences company focused on innovating and commercializing new ways to promote healing and improve mental health. The company is developing digital therapeutics technology and researching psychedelic compounds to support access to safe, evidence-based psychedelic-assisted therapies globally.

Here at Equity Guru, we recently covered Mind Cure. You can read why Gaalen considers this a hidden gem in the psychedelics space here.

Now this stock chart looks a bit better than the rest. It has not broken down to make new record lows. We remain above support at $0.275. If we can hold above, and break above $0.33, then a new uptrend begins, and we have a double bottom reversal pattern. I want to see the volume at this support. The company has cash, they also have a technology which can be used for other purposes. Keep your eyes on Mind Cure.

 

PharmaTher Holdings (PHRM.CN)

PharmaTher Holdings Ltd. is a clinical-stage psychedelics biotech company focused on the research, development and commercialization of novel uses, formulations and delivery methods of psychedelics, such as ketamine, to treat mental health, neurological and pain disorders.  PharmaTher is currently conducting an FDA approved phase 2 clinical study with ketamine to treat Parkinson’s disease and is developing a novel microneedle patch for the intradermal delivery of psychedelics.

This stock did the opposite. It ended green yesterday. We closed up 18%. Today’s price action will be important in determining whether this leads to some momentum, or if we just sell off after a rally. The downtrend is still dominant as per the slope of my trendline. I would really want to see price breach and close above $0.55 to trigger a new uptrend. This stock made moves this year. After breaking out above $0.29, the stock rallied 323% to $1.24. That same level, $0.29, now becomes major support to the downside here.

 

NeonMind Biosciences (NEON.CN)

NeonMind operates two divisions: (i) a pharmaceutical division engaged in drug development of psychedelic compounds with two lead psilocybin-based drug candidates targeting obesity; and (ii) a medical services division focused on launching specialty mental health clinics that integrate psychedelic therapeutics into traditional psychotherapy settings.

In its pharmaceutical division, NeonMind has two distinct psilocybin drug development programs targeting obesity. NeonMind’s lead candidate, NEO-001, employs psilocybin as an agonist at the serotonin 5- HT2A receptor, which is involved in the hallucinogenic effect of psychedelics. The Company’s second drug candidate, NEO-002, employs low-dose psilocybin as an agonist at the 5-HT2C receptor, which controls appetite.

NeonMind, and its strategic medical services partner, SRx Health Solutions, expect to launch NeonMind-branded specialty mental health clinics in Canada that incorporate evidence-backed innovative treatments to address a variety of mental health needs.

Alright…I am intrigued by what I am seeing here. We hit all time lows recently at $0.075, and then bounced. A slight pullback after pinging $0.125. Those with a technical eye might see what I am seeing. The potential of an inverse head and shoulders here. However, today’s price action will be important. We must see a bounce up to form the right shoulder. If we drift lower, then we keep this on our watchlist because maybe we double bottom at $0.075.

 

In summary, psychedelics are bleeding, but there are some decent set ups out there. I like the sector better than Cannabis. As I said, I think you should microdose in order to understand the benefits. This stuff can help people. The one worry I have for the long term comes from politics. Just like Cannabis and the US, I think government action (or inaction) could be the catalyst we might be waiting a long time for.