SK3 Group, Inc. (aka Medical Greens) SKTO
Our regular readers are more than familiar with SKTO, as our coverage of this stock goes all the way back to last year (We actually caught this when it was trading as low as .0023!), but for the sake of our newest members, allow us to profile SKTO once again, and look into recent developments.
SKTO is, of course, part of the enormously successful marijuana sector, which sprung to life several months ago, leading up to the beginning of legal sales in Colorado. We’ve been heavily tracking this market space all the while, and have been afforded chances at percentage gains totaling in the tens-of-thousands as a result.
There are several things going on with this stock that make it ripe for the picking, from operating in such a popular sector, to recent alliances, and one heck of a chart setup.
Before we get into that, let’s touch upon the latest news on the cannabis legalization front. Last Friday, at an appropriations committee hearing, US Attorney General Eric Holder offered this on the legal reclassification of marijuana: “We [the administration] would be more than glad to work with Congress if there is a desire to look at and reexamine how the drug is scheduled”. There is evidence of a very real desire to do just that, with nearly 20 congressional members already having called upon Obama to take the matter into his own hands.
At present, marijuana is actually considered and treated as a Schedule I substance, placing it on par with drugs as dangerous as heroin. Any person with a little common sense and education can tell you that by no means do these two substances belong in the same category.
This comes as the latest in a series of position-softening comments by members of the Obama administration, including the president himself, that signify to us that the groundwork for widespread legalization is already being laid. It’s truly just a matter of time.
This cultural revolution is making it possible for stocks just like SKTO to make small fortunes for quick-witted traders , and one of the things that makes this play exciting is the alliance it has formed with yet another of our favorite past pot plays, AEGY.
Operating as PharmaJanes, AEGY has teamed up with SKTO (operating as Medical Greens) as outlined in a recent PR, with the intent being to “merge the two companies for better market efficiencies and to create a single medical marijuana market support company which can qualify for a higher (AMEX, NASDAQ) market listing.”
If it were just any company involved in such a pact, we might not take it as seriously, but coming from a revenue-producing company like SKTO, it begs our attention. After all, reported gross revenues increased for each of the first three consecutive quarters of 2013, and we wouldn’t be surprised to see that number climb with the upcoming release of 4th quarter financials. The company recently put in for a late filing, and per that statement, we can expect those numbers to be released by April 15th.
Lastly, we’ll take a look at the SKTO chart, which is looking ripe at the moment. The stock has begun to bounce, and indicators suggest we could easily pile on further gains from here.
As you can see on the chart, the RSI is rising sharply, and the MACD is exhibiting the beginnings of a bullish pattern. The main area of resistance we are looking at is the 50DMA of .034, and beyond that, recent swing-highs at .042 and .052 and .0735.
If SKTO were to break resistance at its 50DMA, a return to those levels would mean gains from 65-188% over the current price of .0255, so we’ll definitely be watching SKTO closely.