Terra Tech Corp (OTCMKTS:TRTC) Surges On Technical Buying

Terra Tech Corp (OTCMKTS:TRTC) has been on a downtrend ever since the company posted Q3 results. Terra Tech has developed quite a pattern in 2016 for nimble traders. After earnings, the stock usually sells off. After Q2 numbers, the stock pulled back to its strong support zone just below $.30 before rallying to resistance at the $.50 level. It was this pattern that allowed us at Insider Financial to call the October rally that we saw in TRTC. We said at the time:

Terra Tech Corp (OTCMKTS:TRTC) has been moving up the charts after selling off in August. We are seeing a similar pattern with TRTC that we saw in June and July. The stock established support at the $.30 level, hit resistance at $.40, and then broke through that resistance and ran to $.50. With the November ballot initiatives around the corner and an upcoming Q3 earnings report, TRTC looks to be heating up again.

After Q3 numbers, we said that:

In the short run, we expect to see weakness as investors book profits and shorts try to take the stock lower. Longer term, this weakness will benefit investors that want to get exposure to the best run cannabis company in the U.S.

TRTC broke the first support levels around $.28, but the second support of $.2250 held. If you look closely at the chart, the stock now has established major support at this level. This surge in TRTC is due in part to a recovery in cannabis names, but also technical buying as the shorts covered and long-term buyers reacted to TRTC holding support and being able to gain exposure to what we believe is the top U.S. cannabis company.There are a few reasons why TRTC came crashing down that had nothing to do with Terra Tech. First, Canadian cannabis players Aphria Inc., Mettrum Health Corp., Organigram Holdings Inc., Supreme Pharmaceuticals Inc., Aurora Cannabis Inc. and Canopy Growth Corp. were all halted for five-minute intervals on November 16. Whenever stocks get halted, panic sets in and across the board selling takes place within the sector. That's what we saw take place and good companies like Terra Tech over-corrected to the downside.Second, the appointment of Senator Jeff Sessions as Attorney General by President-elect Donald Trump has spooked the markets. We feel this is a mistake as Trump has stated in the past that he favors legalization. Furthermore, what does every first time administration want? It's a second term. The people of the U.S. have spoken after marijuana ballot initiatives passed in every state except for Arizona. Trump knows what the people want and he above all wants to be liked by the people and win a second term. We believe the Justice Department under a President Trump will be no different than Obama's. Don't expect the trend towards legalization to slow down. As Terra Tech CEO Derek Peterson said in a recent interview:

"Following the recent election, we remain confident the incoming administration will respect states' rights to autonomous decision-making, thereby allowing the cannabis industry to continue its rapid expansion. President-Elect Trump has stated his opinion in favor of allowing cannabis regulations to be decided on a state-by-state basis and we believe he understands the clear economic and social benefits surrounding our industry. Over half of the states in the U.S. have legalized some form of cannabis, whether medical or recreational, which has sent an overwhelmingly positive message from the electorate in support of the industry. We are already seeing significant tax revenues generated by medical and recreational cannabis, as well as the creation of thousands of jobs, across the country. With the overwhelmingly positive response received on Election Day from the voting public, we believe that public sentiment is in our favor, and that core decision makers will be reluctant to stifle a flourishing industry that has the support of large swathes of the voting public."

We agree with Derek Peterson and echo the same sentiments. As we’ve said before, we believe there’s no better company positioned to benefit in California and Nevada than Terra Tech. California is the seventh largest economy in the world and the recreational marijuana market will be largest market in the world. In Las Vegas, the city will become the “Amsterdam of the U.S.” While it will take 18 to 24 months for all the specifics to be worked out, Terra Tech will have three dispensaries to sell cannabis to Las Vegas’ more than 40 million yearly visitors. We believe the low is in on TRTC and expect new highs coming 2017. We will be updating our subscribers as soon as we know more. For the latest updates on TRTC, sign up below!Disclosure: We have no position in TRTC and have not been compensated for this article.