Tilray (NASDAQ:TLRY) has always been a big deal among cannabis stocks and lately TLRY’s stock has become more impressive except with Wall Street. And today it stinks of opportunity for buyers. Let’s check what’s going on off and on the price chart and then come up with a risk adjusted position to grow your trading account.
Canopy growth (NASDAQ:CCG). Aurora Cannabis (NASDAQ:ACB). New Age Drinks (NASDAQ:NBEV). Producers of sundials (NASDAQ:SNDL) and many more. From the largest to the smallest, and for producers of jars of all flavors, the last two months have mostly been a house of pain for investors.
On this front, Tilray shareholders can complain as a market leader, in the worst possible way, with his peers. Three months after peaking at $ 67 in early February, stocks are down 80%. And today and nearly a month off its corrective low, stocks are still at 75% of that relative high.
Problems encountered by TLRY actions
To be fair, Wall Street’s wider rotation from higher multiple growth stories, which began in February, has barely loosened its grip. And I guess TLRY, along with other cannabis stocks, may sympathize with others such as the hard-hit PSPCs. Capital of Churchill (NYSE:CCIV). QuantumScape (NYSE:QS). Open Door Technologies (NASDAQ:OPEN). There is a lot of pain to go through.
But the smoking in TLRY stocks still ranks high, in a disgraceful way. And behind this burden lie two other problems that weigh on investors.
First, there’s the overhang that Tilray feels alongside other pot stocks. Optimism about rapid federal legalization under a pot-friendly Biden administration has faded, as the president’s well-guarded first 100 days failed to find a pleasing political will for cannabis. And that’s a problem.
Ultimately, Tilray and other Canadian pot companies cannot maintain their status as a public company and market marijuana in the United States until there is a change at the federal level.
Second, size matters. But it’s also a two-way street and a challenge for TLRY these days.
In early May, Tilray closed its deal with Aphria, making the combined company the world’s largest cultivation company on a pro forma sales basis. But a valuation of around $ 7 billion, compounded by disappointing quarterly results, has apparently left many investors on their toes.
TLRY weekly price table
Source: Charts by TradingView
It is almost certain that beneficial changes will occur when it comes to the cannabis stalemate and the sentiment surrounding TLRY’s place in the industry. And at the end of last month, word from the House Judiciary Committee preparing to reintroduce a bill for the federal legalization of marijuana increased the stock of TLRY.
What will tomorrow usher in? Cannabis cafes are still unlikely, of course. But Tilray’s shares are leaving a new smell of rising profits on the weekly price chart.
And this is the one that seems worth sampling today.
Net income on TLRY shares
Technically, Tilray shares confirmed a third attempt at troughs after two previous attempts in March and April when the stock market corrected bearish. The modest follow-up to start the month has TLRY around 4% to 5% above a double candlestick low pattern.
For some, today’s Tilray share price may put it out of reach. But I’m optimistic it’s a buy. With stochastics aligned bullishly and just starting to rise from oversold territory, I see a decent risk-reward proposition under the idea that an uptrend will emerge in the second half of 2021.
Right now and to better prepare for a bullish price cycle in TRLY stock, hedge against downside risk or even put traders in an advantageous position to accumulate on weakness through active management, a September $ 15 / $ 35 necklace smells the color of silver in our opinion.
As of the publication date, Chris Tyler does not have (directly or indirectly) any position in any of the stocks mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.
Chris Tyler is a former ground-based derivatives market maker on the US and Pacific stock exchanges. For additional market information and related thoughts, follow Chris on Twitter. @Options_CAT and StockTwits.