Some stocks are more directly affected by the headlines than others. In the case of cannabis growers like TLRY, there is a huge relationship. With regulation and decriminalization news in the headlines again, TLRY has the potential to spike. I’ll tell you just how much…
Feeling Twisted By the Markets? You Need a Roadmap!
I know there are some folks out there who probably will refuse to trade a company like Tilray (TLRY) because they sell cannabis products, and those traders have a moral stance against cannabis.
That is completely fine, and I understand where you’re coming from.
Personally, though, I believe if people are buying and selling something on the stock market, we can make money off of it, so I’ll still talk about the opportunity here.
TLRY is one of the top “green” stocks in the cannabis sector.
All cannabis stocks (and similarly, gaming stocks like DKNG) are in a bit of a weird position. They are legal in some places, illegal other places, and there is a lot of in-between.
As a result, these stocks are more prone to massive swings based on headlines than most other stocks.
Usually, I ignore the headlines in my trading.
But a chart like this is pretty hard to ignore:
That big climb around February last year? That came as a result of legalization talks at the federal level.
Federal regulation talks have the potential to be massively transformative for crypto. The U.S. government could legalize and regulate the entire industry in one fell swoop, which would immediately legitimize TLRY’s business unlike ever before.
So you can see why it makes such an impact on the stock price.
All this is a precursor to pointing out that the House of Representatives is saying they’ll discuss a bill to legalize marijuana next week.
Based on the performance we’ve seen with such news in the past, I’m very bullish on TLRY at least in the short term.
I’m holding four $12 calls for June and have a 60% profit so far.
TLRY is up over 40% over the last five days.
But I don’t think a target of $20 is unrealistic, especially if the news persists.
And while it doesn’t seem likely, if the Federal government actually did move to decriminalize, we’d probably see a massive spike, at least in the short term.
If it’s not your thing to trade a company like TLRY, I respect that.
But it’s a move you should be aware of, so I wanted to share it with you.
Jeffry Turnmire and InvestPub do not provide investment advice. Trading involves a substantial risk of loss and is not suitable for all investors. Many traders fail and you should not trade with money you cannot afford to lose. If you need personal financial advice, consult a financial advisor.
Daily Profit Publishing and Jeffry Turnmire do not provide investment advice. Trading involves a substantial risk of loss and is not suitable for all investors. Many traders fail and you should not trade with money you cannot afford to lose. If you need personal financial advice, consult a financial advisor.
We are not licensed to provide you personalized investment advice. Nothing in these communications should be construed as personal investment or financial advice.
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