Tilray Brands, Inc (NASDAQ:TLRY) opened at roughly 4.5% higher on Thursday after the Cannabis Administration And Opportunity Act (CAOA) was introduced in the United States Senate. If signed into law, the long-awaited bill sponsored by Senate Majority Leader Chuck Schumer and Senators Ron Wyden and Cory Booker would remove marijuana from the Controlled Substances Act and expunge prior convictions.
Tilray plummeted to trade below Wednesday's low-of-the-day after gapping up on the news. If history is any guide, the CAOA law is unlikely to reach President Joe Biden's desk anytime soon. In recent years, Congress has voted on many proposals to pave the path for federal cannabis legalization, including the SAFE Banking Act, which the Senate has rejected six times.
Tilray's pullback on Wednesday may be healthy because the stock is trading in a verified uptrend, needing a higher low. Tilray entered an uptrend on July 5 and has since made a constant series of higher highs and higher lows. The recent higher low was formed on July 15 at $3.30, and the most recently confirmed higher high was printed the day before at $3.81.
Tilray may have formed the next higher high within the uptrend on Thursday. Bullish traders and investors should look for the stock to print a reversal candlestick above the $3.30 level in the coming days, as this could imply the stock is about to make a higher low. If this occurs, it may present a good entry point for traders who aren't already in a position. If Tilray concludes the trading session near its low-of-the-day price, the stock will print a bearish Marubozu candlestick, indicating that lower prices will return on Friday. If bulls enter and close Tilray's daily candle with a long lower wick, the next higher low is possible.
Tilray is trading above the eight-day and twenty-one-day exponential moving averages (EMAs), with the eight-day EMA going higher than the twenty-one-day, both of which are bullish signs. In addition, the stock is trading near the 50-day simple moving average (SMA). Tilray should conclude the trading day above the 50-day simple moving average (SMA), indicating that longer-term sentiment is bullish.
Tilray's resistance levels are $4.24 and $4.71, while its support levels are $3.61 and $3.02.
Featured Image: Megapixl @Kuzma
