Tilray Inc. (NASDAQ: TLRY)
Shares of Tilray Inc. ($TLRY) ripped higher Tuesday morning as anticipation for the legalization of marijuana in Canada on October 17 gains momentum.
The stock is now up over 400% in just the last month as FOMO sets in and short sellers get squeezed.
Pot stocks across the board were trading higher including Cronos Group ($CRON) and Canopy Growth Company ($CGC) which have both been in the news lately.
TLRY News
Tilray shares skyrocketed in premarket trading on Wednesday after the Drug Enforcement Administration (DEA) allowed the Canadian marijuana company to export a medical cannabis formulation to the United States for use in a clinical trial in California.
The company will work with Dr. Fatta Nahab, a researcher at the University of California San Diego, to examine the performance of the formulation which is designed to treat a common neurological disorder known as Essential Tremor. Tilray said that the product contains THC and CBD compounds, and that the trial is scheduled to start early next year.
“Tilray is proud to support this crucial research. If this study can identify cannabinoids as a potential treatment for patients suffering from essential tremor, we can conduct further research and potentially provide alternative effective methods of relief for the high numbers of patients with ET,” said Dr. Catherine Jacobson, Director of Clinical Research at Tilray.
New York-listed shares of Tilray ended the regular session on Tuesday at $154.98 after adding $34.79, or 28.95%. The incredible gain raised it market cap by nearly $3 billion, making it the biggest cannabis company in the world at a capitalization of more than $14 billion.
Investors are likely to push that cap even higher during the normal hours of trading on Wednesday, taking into consideration that the shares were already changing hands at $216.00 after a gain of $61.02, or 39.37% before the opening bell. Tilray has maintained its positive momentum on the Nasdaq since signing cannabis supply agreement with the Supreme Cannabis Company last week
Stocks of other marijuana companies were also impacted by the news, with Canopy Growth climbing 6.7% percent and Aurora Cannabis jumping 6.9% on Tuesday. Cronos Group gained 13% to close at $14.94.
The possession and use of marijuana for any purpose is illegal in the US under federal law. However, recreational consumption of the drug is allowed in some states such as Washington, California, Colorado and Oregon. Canada is set to become the only G7 nation to legalize recreational weed use for adults next month.
In the 2018 elections, more states such as Michigan and Oklahoma will be voting on recreational or medical cannabis legalization. Marijuana enthusiasts are optimistic that the US industry is set for greener days a few years from now, thanks to the intensifying legalization campaign.
TLRY Technicals
Shares of $TLRY are currently trading in the $220 range after closing Tuesday just below $155. When shares gap up this much we typically see a selloff at the open as profit takers look to cash in.
However, we could see a new wave of FOMO set in and this stock could take off even higher. Expect extreme volatility with whippy price action and larger spreads throughout today.
Since $TLRY is trading at all time highs we will want to look at premarket levels and large whole numbers like $200 for potential support and resistance.
Right now we are in a consolidation pattern between $210 and $220 so we will want to see prices break out of that range for a breakout play.
Below $210 we will want to look at $200 for support followed up by $185 where we had some resistance in the premarket.
Look for resistance at $220 and $225 with possibly some resistance at $230 and if prices push past those we would want to watch $250 closely as a major resistance level.
