Tilray (TLRY) is trading firmer Tuesday morning as traders react to their Q4 results where revenue was reported to be up 204% to $15.5 million. TLRY reported a net loss: ($31.0 million); loss/share: ($0.33).
And here is a statistic that all other companies we follow do not report - the average net selling price per gram: $7.52 (+5%). Total kilogram equivalents sold: 2,053 (+196%).
TLRY is the stock of the day at Real Money and if you did not know they engage in research, cultivation, processing and distribution of cannabis. Let's check out the charts and indicators for this so-called pot play.
In this daily bar chart of TLRY, below, we can see the huge rally from near $20 in August to around $300 in September. Prices have corrected to the downside the past five to six months but keep in mind that prices are still up significantly from their August lows.
In the few short weeks of the run up from $20 to $300 the financial press quickly labeled TLRY a bubble. Unfortunately, journalists do not understand what a bubble or mania actually is, how they form and how they end. They missed it in 1999 and since then any market that rallies sharply is labeled a bubble.
TLRY is trading just below the bottoming 20-day and 50-day moving average lines (note the shorter averages due to the lack of trading history). Trading volume was extremely heavy in September and it seems to have settled into a more normal pattern.
The daily On-Balance-Volume (OBV) line moved up sharply in August and September as traders rushed in but notice that the OBV line has remained steady. A steady OBV line suggests that traders have stayed with their initial positions or that buyers and sellers are in balance.
The Moving Average Convergence Divergence (MACD) oscillator is just below the zero line and a modest price rally could generate an outright go long signal in the days/weeks ahead.
In this daily log chart of TLRY, below, we show the same data as the first chart but the log scale may make it easier to "read". A rally above $85 is likely to generate a number of buy signals.
In this Point and Figure chart of TLRY, below, we can see the price action without volume and indicators. Looking closely, we can see that a trade at $81.44 will be bullish and a decline to $69.45 will weaken the chart.
Bottom-line strategy: TLRY looks like it has rebased in the $80-$66 area and is poised to rally. Aggressive traders looking to be involved in this space could consider going long above $81.
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