To say that Tilray has been volatile almost seems like an understatement at this point.
The cannabis space has been red hot this year, as the group gathered momentum in January. M&A action has helped to fuel the move as well, with Aphria and Tilray agreeing to a merger.
One thing's for certain - volatility will continue to pick up. Particularly as Aurora Cannabis (ACB) - Get Report is gearing up for earnings after the close of trading Thursday.
Let’s look at some charts.
Aphria’s volatility is clear, with shares eclipsing $31 on Wednesday and breaking below $20 on Thursday.
So far, the 10-day moving average is acting as resistance, as shares attempt to hold up above the prior all-time high from 2018 at $19.87.
If it can do so, look for another run up toward $24, then a push back toward $30. If Aphria can’t hold up over $19.87, keep an eye on the 10-day moving average.
Below that measure puts Thursday’s low in play, down at $17.61. Losing that mark could put the $13 to $14 area in play, which was resistance when Aphria was consolidating its gains last month.
Like Aphria, Tilray has been all over the place. I want to see it hold near this area, though.
It has the 10-day moving average just below Thursday’s low, while a key multi-year level sits near $34. If it holds, Shares could easily bounce back into the mid-$40s and possibly the $50s.
Knowing how far these stocks can rebound is hard to know until the rebound is actually playing out.
On the downside, a break of $34 could put prior uptrend resistance in play (blue line), followed by the 21-day moving average and the 2020 high near $23.
A break of all of these marks could put the 50-day moving average on the table, but at that point, the bull run might be over. We’ll need to re-evaluate Tilray in that scenario.