Tilray Brands stock price has plunged and moved into a bear market after falling by over 53% from its highest point this year. It has moved from a high of $2.32 in October to the current $1.08. It is hovering at the lowest level since September 11. So, what’s next for the TLRY stock?
Tilray stock price technical analysis
The daily timeframe chart shows that the Tilray Brands stock price has been in a strong downward momentum in the past few months. It has plunged from the October high of $2.32 to the current $1.08.
The stock has moved below the 61.8% Fibonacci Retracement level at $1.11. It has moved below the strong pivot, reverse point of the Murrey Math Lines tool at $1.17.
Tilray stock price has moved below the 50-day and 100-day Exponential Moving Averages (EMA). The two averages are nearing their confluence, which will form a mini death cross indicator.
TLRY has moved below the Ichimoku cloud and the Supertrend indicators, a sign that bears are still in control. Therefore, the most likely scenario is where it continues falling to the ultimate support at $0.78. This target is alongside the 78.2% Fibonacci Retracement level.
On the flip side, a move above the 50% Fibonacci Retracement level at $1.35 will invalidate the bearish outlook.
TLRY stock chart | Source: TradingView
Why TLRY stock price is crashing
There are two main reasons why the Tilray stock price is in a deep bear market. First, the ongoing crash is because Donald Trump is yet to make his decision on the reclassification of cannabis into a less dangerous drug in the United States. That reclassification will move it from a Schedule 1 to a Schedule 3 drug.
Such a move would be important as it would recognize its role in the medical industry. It would also simplify business operations by making it easier to access banking solutions in the country. As things stand today, cannabis companies find it hard to access national banks.
Donald Trump mentioned that he was “within weeks” of making its decision on cannabis in August, but no decision has been made yet. There is a chance that he may decide against reclassification because of the rising pressure from conservatives. The continued delay also explains why other cannabis stocks are crashing.
Tilray Brands stock price has crashed because of its recent earnings, which showed that its revenue and profits rose modestly. Its revenue rose by 5% in the last quarter to $209 million, while its net income rose to $1.5 million.
A closer look at its business shows that the cannabis revenue rose by 5% to $64.4 million. Its distribution and wellness businesses made over $15.2 million and $74 million.
However, its beverage business, which it has invested heavily on, continued to deteriorate, with its revenue falling to $55.7 million. This is a key reason why its stock has dropped, as it signals that its most important strategic investment is not paying off.
On the positive side, the company’s balance sheet is improving, with its cash balance rising to $264 million.
READ MORE: Tilray stock: why options data is skewed to downside despite solid Q1 earnings
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