The Tilray stock price reversed course last week and is on a 3-day losing streak. However, TLRY is now approaching several significant support levels.
Canadian pharmaceutical supplier Tilray Inc (TLRY: NASDAQ) started the post-independence day week the same way it finished the last one. TLRY slipped 2.96% to close yesterday’s session down $0.51 to $16.72.
Tuesday’s decline has now seen 13% wiped from the company’s value in the last week. Furthermore, TLRY is close to 30% below the 9th of June’s $23.04 high.
This weakness has dragged Tilray Inc dangerously close to some important levels. And should the support fail, investors hopes of a return to February’s $67.00 peak may go up in smoke for the foreseeable future.
Looking at the daily chart, we can see that TLRY is nearing a trio of supportive indicators.
Firstly, a horizontal line of support can be drawn from the $15.60 low on January 25th. This has proved to be a pivotal price level over the last three months and been both a support and resistance level.
Additionally, the 200-day moving average is present at $15.49, just below the horizontal line.
Thirdly and crucially, a rising trend from October is visible at $15.13, reinforcing the confluent support.
Therefore, $15.13 represents an important floor for the Tilray stock price. And should TLRY penetrate this support on a closing basis, it could more than halve in value.
In my opinion, the December $10.01 high becomes a logical target in the event of a broader decline.
However, the significance of the support levels will likely attract some buying.
And on that basis, as long as TLRY remains above $15.13, it could offer longs a high-value trade. A potential upside target is June’s $23.04 high. Therefore, Purchasing TLRY at Tuesday’s closing price with a stop below $15.00 risks $1.72 vs a potential gain of $6.32. Obviously, this excludes dealing and associated slippage costs.
This trades attractiveness will not go unnoticed, and subsequently, an increase in buying will lead to more selling if the price breaks down.
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