With the increase in the legalization of recreational marijuana in several U.S. states, cannabis stocks had a very strong bullfight in 2020, with many stocks multiplying their value many times over.
One of these companies is Trulieve Cannabis (CSE: TRUL) (OTC: TCNNF) who has accessed from its historical minimum ($ 8) in March last year a $ 67 in February of this year, a massive 640% increase in just 11 months.
However, since the all-time high was set, stocks began to slip and are now virtually falling. 50% since February.
One of the reasons contributing to this sale is that the CEO’s husband is on trial on charges of federal bribery and corruption. While not involved with the company, the market has clearly shown concerns about whether the company could be adversely affected by this.
But that hasn’t stopped CEO Kim Rivers from “buying the dive” with a big one $ 1 million insider trading on August 17, increasing its position in shares in the company 4.5%, which communicates a strong confidence on the part of the management of the company.
As for the business itself, Trulieve Cannabis currently has 97 U.S. dispensaries with 88 of those located in Florida and currently in the process of acquiring MSO Harvest Health & Recreation.
This agreement will give the company access to 15 more dispensaries in Arizona, further increasing the company’s reach and profit potential.
In addition, the company also recently obtained a medical cannabis license in Georgia, a populated state near Florida, where Trulieve it has most of its current infrastructure.
The company is also highly profitable and has a net income of $ 40.9 million in P2, more than double the quarter of the previous year.
Given all this, we believe Trulieve Is cannabis a purchase?
The answer is yes, but not at current price levels, as price action now suggests that there will be more disadvantages. In our technical analysis below, we share what we believe is a good price range to start accumulating stocks.
As already mentioned, stocks have fallen 50% from his ATH in February. Currently, the price remains less supportive, but the price action generally seems weak / heavy, suggesting a medium-term downside unless the flow of orders clearly changes from bearish to bullish, which still we are not seeing.
Therefore, if this downward trend in the short term continues to decline, we believe that the key long-term support between $ 20 and $ 24 may offer a great opportunity to acquire shares of this profitable company at a discount.
Positioning of options
Because it is a Canadian stock, we have no options data on TRUL.
THE FULL REVELATION: Chris Capre does not currently have any stock or option positions on TRUL. If you want more information The trades of Chris i positions, you can access through Negotiation masterclass where he shares his live business, additional investment ideas and daily market analysis.
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