To say it was a wild week for marijuana stocks is an understatement. In just one week, virtually the entire sector got short squeezed to high heaven. Many marijuana stocks experienced moves of over 50-200%+ in just a few days, including Sundial Growers, Organigram Holdings, Aphria and, of course, my favorite ultra speculative weed stock – Tilray. Having advanced this hard and fast in such a short period of time, these stocks rapidly and abruptly came back down to Earth today. Virtually all took a 20-50% haircut…in one day. Congrats if you got in early and sold on Wednesday, and thoughts and prayers for those who bought Wednesday and held into today. But that is all in the past, we are looking for future plays. Which begs the question: Should I Buy The Dip On Tilray Stock?
First of all, we at Parabolically like to joke around and repeat the mantra “stonks only go up.” If you have been making easy money in the market this past year since the 2020 bear market, you should know why. It is a fact, by any measure, that this market is by far the most absurd (and profitable) in history. If you have been following along, we have caught multiple monster plays recently. Check out our piece on AMC, which turned into an 800% gain in one week here. Thanks to ultra accommodative easy money policies from the Fed, massive money printing and “free” trading apps, the current speculative frenzy has gone totally bananas.
Although this market has gone wildly parabolic, we like to also remember that market gravity always catches up with parabolic moves at some point. What goes up, especially several hundred percent, must come down. And come down fast, they do.
Which brings us to Tilray stock.
Tilray finished the trading day at 32.16, dipping to about $30 after hours, filling the gap it left from February 9th.
This represents about a 50% drop on the day…
Although this drop is massive, there is more context to be added. Tilray began the year trading around $8/share. The stock moved about 250% to finish January and dipped slightly to $16 into February.
Since then, the stock has taken a rocket ship ride to the moon, hitting a multi year high of $77 after hours on Wednesday.
However, the stock is still up nicely on the year…but what will it do next?
Now the question on everyone’s minds…what will it do next? Is the bull run over?
To answer this, we must look on the monthly chart for the best perspective.
See chart below:
To put this into perspective, I have been writing about the pending marijuana bull market for a while. Check out this article from November on why I thought Aphria stock was a “screaming buy.”
Why was I so bullish?
Simply put, Monthly MACD was just about to turn green after a long bear market.
Essentially, a flip to green MACD on the monthly chart is probably the most bullish indicator you can ever find.
Did I have any idea it would pump this hard?
Yes, yes I did. I have been in Tilray, APHA and SNDL for months, waiting.
So what now?
Tilray Stock Prediction
As you can see from the chart above, we are only in the second month of this bull run.
After a nasty smackdown like the one today, is it really possible that the stock can keep moving higher?
The answer is yes, it is possible. Stocks that break out on monthly charts tend to continue moving higher unless there is some kind of exogenous event.
In particular, a stock market crash, or highly negative news (like marijuana not being legalized federally, or something along those lines.)
So, if you have the stomach for it, and believe in the company long term, just buy the freakin’ dip! #TilrayToTheMoon?
In general, marijuana companies do have a positive outlook considering the recent positive news towards full national legalization of late, particularly a Democratic administration. As well as multiple states already legalizing it this year. Check out the map where it is legal here.
Conclusively, there is a lot of potential for massive growth in marijuana names. Excluding one of these exogenous events, it is very likely these stocks will continue pumping, despite the mind boggling drop today.
What do you think about Tilray and the marijuana sector?
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