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small-cap

One NASDAQ- Listed Cannabis Stock at Support Levels- Tilray Brands Inc

May 01, 2023 | Team Kalkine
One NASDAQ- Listed Cannabis Stock at Support Levels- Tilray Brands Inc

Tilray Brands Inc

Tilray Brands, Inc. (NASDAQ: TLRY) is a global cannabis-lifestyle and consumer packaged goods company. The Company operates through four segments: cannabis business, distribution business, beverage alcohol business, and wellness business.

Recent Business Updates:

  • Bipartisan SAFE banking bill reintroduced: The Secure and Fair Enforcement (SAFE) Banking Act is a proposed legislation aimed at securing crucial banking and financial services for legitimate marijuana businesses while safeguarding financial institutions against potential sanctions from federal authorities for dealing with them. The reintroduction of the SAFE Banking Act is seen as a significant initial move towards the eventual legalization of cannabis. It is noteworthy that TLRY, owing to its involvement in the alcohol sector, has already established partnerships with distributors in the United States.
  • HEXO Corp. Announced Acquisition by Tilray Brands: HEXO Corp. has recently declared that it has signed a definitive arrangement agreement with Tilray Brands, Inc. for a transaction that would entail Tilray's acquisition of all the outstanding common shares of HEXO, subject to the approval of HEXO shareholders and the fulfillment or waiver of other closing conditions. Pursuant to the Arrangement Agreement, each shareholder of HEXO will receive 0.4352 of a Tilray common stock in exchange for every HEXO Share held, which, based on the volume-weighted average price of Tilray Shares on the Nasdaq Stock Market during the 60-day period concluded on April 5, 2023, implies a purchase price of USD 1.25 per HEXO Share.

Technical Observation (on the daily chart)

With a past year correction of almost -54.01%, the price has been in a persistent downward trend over the long run. The price has corrected further by 15.75% since its Q3FY23 results announcement on April 10, 2023. Also, the momentum indicator RSI (14 period) displays a value of 43.89, suggesting a further consolidation or a short-term relief rally. Price is also below the 21-day SMA and 50-day SMA trend-following indicators, which can serve as dynamic short-term resistances.

As per the above-mentioned price action, recent business updates, Q3FY23 results, expectations of passing of SAFE Banking bill and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Tilray Brands Inc at the current price of USD 2.32 as of May 01, 2023, at 06:45 am PDT.

 Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is May 01, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.