With the Canada-based cannabis company’s quarterly earnings report, and the accompanying event risk out of the way, traders should note that pot stock Cronos Group has just sent up a compelling buy signal, based on one long-term moving average, says Elizabeth Harrow.

Plus, with a healthy degree of skepticism priced into the shares, our contrarian analysis suggests this weed name has plenty of potential buyers on the sidelines to fuel a bounce in the coming weeks.

Specifically, uptrending CRON stock is now trading within one standard deviation of its 52-week moving average. The last time the shares pulled back to test support at this moving average after a prolonged period of trading above it (defined, for these purposes, as 80% of the time over the past 20 weeks), Schaeffer's Quantitative Analyst Rocky White reports that the stock was up 5.92% four weeks later. And three months after that prior pullback to support at its 52-week trendline, CRON was up 35.50%.

Following the marijuana stock’s latest bounce from this moving average support, a rush to cover by short sellers could contribute to more big gains. Short interest rose by 33.5% over the past two reporting periods, and now accounts for a formidable 17.9% of CRON's float.

Likewise, put open interest on the equity is approaching annual highs. With 100,239 CRON puts currently outstanding, Trade-Alert notes that put open interest on the stock arrives in the 91st percentile of its annual range.

By comparison, CRON call open interest currently registers in the slightly tamer 77th annual percentile, as speculative players have shown a greater interest in puts over calls.

Meanwhile, analysts seem to be on the fence. The stock has garnered just four recommendations from brokerage firms -- two Buy ratings and two lukewarm Hold ratings. Plus, the average 12-month price target for CRON is just $6.00, a price point that has generally served as a floor for the shares in 2018. Given this middling consensus outlook, it would seem that Cronos shares have some room to benefit from analyst upgrades and/or price-target hikes in the near future.

With CRON set to bounce from a longer-term moving average, and plenty of room for traders to grow more bullish on the medical marijuana name, now is an ideal time to bet on more upside via intermediate-term call options. Traders may want to consider the stock’s January 2019 or April series, where implied volatility levels are a few percentage points lower than the shorter-term November and December weeklies in play right now.

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