Toler said that Hydrofarm is a 44-year old company that sells everything farmers need to grow crops of all kinds indoors. They have supplies, equipment, lighting, soil and fertilizers. Their products improve yields and lower costs.
When asked about cannabis, Toler estimated that about 75% of their sales stem from this single industry. He said the cannabis industry is moving all indoors, where they can control quality, consistency and security while getting up to four crops per year.
Let's check out the charts of HYFM.
In the daily Japanese candlestick chart of HYFM, below, we can see an "uneven" performance since the company went public. There was an initial rally from December to late February but then prices gapped lower and retraced much of the advance. Prices have "zigzagged" sideways since early March. HYFM is currently below the 20-day and 50-day moving average lines.
The On-Balance-Volume (OBV) line is neutral until late April when it makes a "pop" to the upside. If the OBV line continues to improve it will tell us that buyers are more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is just below the zero line in sell territory but could easily move back into the positive.
In this daily Point and Figure chart of HYFM, below, we can see a potential downside price target in the $43 area. A rally to $67.41 or higher should improve the picture.
Bottom-line strategy: The charts of HYFM need more base building before I am willing to recommend the long side. Meanwhile, I plan on looking for their products in my local retailers. Got to do your homework!