Tilray Stock Attempts Bullish Reversal Following New Hampshire Legalization News
Tilray Inc (NASDAQ:TLRY) broke up from a descending channel Benzinga called out but then fell down to backtest the upper descending trendline of the channel and held above it. The break up from the channel was completed on high volume on the 15-minute chart, indicating the pattern was recognized but the stock lacked bullish continuation.
The break from the channel may have been helped by a Marijuana Moment report which said New Hampshire lawmakers found a strategy to begin the process of legalizing cannabis in the state next year. Legislators in the state’s senate are hoping to introduce a constitutional amendment which, if passed, would put legalization on the ballot in 2022.
Options traders don’t see Tilray making a bullish reversal on the news, however, and on Thursday morning two institutional traders purchased two orders of put contracts totaling $322,905.
See Also: How to Buy Tilray Stock Right Now
The TLRY trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:
- At 10:06 a.m., a trader executed a call sweep at the ask of 209 Tilray options with a strike price of $20 expiring on Sept 24. The trade represented a $151,525 bullish bet for which the trader paid $7.25 per option contract.
- At 10:23 a.m., a trader executed a call sweep at the ask of 209 Tilray options with a strike price of $20 expiring on Oct. 29. The trade represented a $171,380 bullish bet for which the trader paid $8.20 per option contract.
The Tilray Chart: Tilray’s stock has been trading in a steep downtrend since making a June 9 high of $23.04, making consistent lower highs and lower lows on the daily chart. On Wednesday Tilray printed a bullish Marubozu candle, which indicated higher prices may come on Thursday.
On Sept. 14 Tilray’s relative strength index (RSI) reached the 33% level that put the stock near oversold territory, which is a buy signal for technical traders. When Tilray’s RSI reached the 30% mark on July 27, the stock soared 30% over the following two trading days.
Tilray is trading below the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading over 30% below the 200-day simple moving average which indicates overall sentiment is bearish.
- Bulls want to see big bullish volume come in to confirm the break of the channel and for momentum to push the stock up to make a bullish trend change. There is resistance above at $12.54 and $14.16.
- Bears want to see Tilray’s stock fall back into the channel and for the stock to continue in its downtrend until it loses support at $10.77. Below the level, there is further support at the $8.78 mark.
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