Shares of cannabis company Tilray Brands (TLRY) soared quickly to around $300 back in 2018 but today trade for just a touch above $3 — a rude awakening to buy-and-hold investors who looked for ground-floor opportunities in a new industry with great promise. There should be a case study on this at Harvard.
Tilray recently closed on an investment in HEXO Corp. (HEXO) that seems to promise cost-synergies but the charts may need more help. Let’s take a close look.
In the daily bar chart of TLRY, below, we can see that the shares have declined from $15 back in early August to around $3 in June and July. TLRY trades below the declining 50-day and declining 200-day moving averages.
The On-Balance-Volume (OBV) line shows a temporary advance in March that was wiped out by early June. Aggressive buyers do not seem to hang around for long.
The 12-day price momentum study shows improvement from April to June to July but that has happened before and only resulted in a temporary advance.
In the weekly bar chart of TLRY, below, we used a log scale because of the big percentage move in the stock. Prices are in a long-term downtrend below the declining 40-week moving average line.
The weekly OBV line is more bearish than the daily line (above) as it is below the lows of 2020. The MACD oscillator is bearish.
In this first Point and Figure chart of TLRY, below, we used the average-true-range to plot the X’s and O’s and the software came up with a $0 — zero — price target.
In this second Point and Figure chart of TLRY, below, we used a traditional even point moves to arrange the data. Again the target is $0.
Bottom-line strategy: I have no crystal ball for the cannabis industry and no special knowledge about Tilray, but the charts at this point in time are not a friend of investors. Avoid the long side of TLRY.
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