Fundamentally, Trulieve should be one of the best cannabis stocks to buy – but what does the technical analysis tell us? Let’s dive into Trulieve and when to buy or sell this cannabis stock.
Trulieve Cannabis (OTC: TCNNF) continues to grow steadily and now holds a 52% share in one of the largest cannabis market in in the US – Florida. While 79% of its customers are repeat buyers, the company caters to 1,500 new medical cannabis patients on a monthly basis. In 2020, the company’s sales rose 106% year over year to $521.5 million, while net income was up 19% at $63 million.
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If you had taken Cannin.com’s advice to buy TCNNF last year, you would have doubled your investment
The company already has a stronghold in the Sunshine State and is now is looking to strengthen its presence in other regions. On April 5, Trulieve announced that it acquired a dispensary license from Anna Holdings, and will be operating under Keystone Shops. This will expand Trulieve’s footprint in Pennsylvania and take the total count of dispensaries to 86.
Trulieve has been very strategic with setting up operations in densely populated markets and Pennsylvania is certainly no exception as it is the fifth most populated and limited-license state in the US. Trulieve also expanded its national footprint through acquisitions of Solevo Wellness and PurePenn.
The company expects these aggressive acquisitions and expansion strategies to start paying off as early as mid to late 2021. In its guidance for 2021, it accounted for a full year of operations from Pennsylvania, continued growth in Florida as well as its Massachusetts, Connecticut, and California locations.
With the stock closing at $39.41 on April 30, analysts have a 12-month average target price of $67.64 for Trulieve Cannabis, an upside of nearly 100%, suggesting that, per the fundamentals, now may be the time to buy this cannabis stock. But do the technicals tell the same story for Trulieve? After reviewing the chart below, should you buy or sell this cannabis stock?
Cannin Technical Analysis: Is it Time to Buy Trulieve Cannabis Stock?
Per our weekly log chart below, Trulieve Cannabis continues to look outstanding. The stock has been on a strong uptrend since April 2020 lows. As we review the chart, we note there are multiple green bars of strong weekly closes and down weeks are met with up weeks.
The recent pullback from $54 to $34 looks similar to point A on the chart. Here we see a 5 week pullback where buyers stepped up and drove the stock from $18 to $54.
Point A also marks a pullback and retest of the $16 level – which had bee the prior high for Trulieve Cannabis.
Point B on the chart shows a big buying breakout at the $31 level – signaling significant strength. Also, the last week traded at that level again – signaling a healthy retest of that breakout level. Remember quality trends retest the breakout levels then resume the same trend. Now, we are seeing just that as buyers are stepping up at $34.
Bottom Line: Is Trulieve Cannabis Stock a Buy?
One caveat on this chart is the last 5 weeks had 5 down weeks in a row (marked by Point C) which does indicate a bit more selling pressure at these levels. Additionally, resistance area on the chart is at $54 where sellers could step up again and turn the chart sideways for a bit.
However, this chart looks good with a strong uptrend. By our assessment, the odds favor staying long 60-70% of the time. We believe this type of chart will resume to new highs.
Off the cuff, we see Trulieve Cannabis stock trading to $75 or even $100 in the coming year – a 2-3x upside from current levels.
Our guidance is to enter with 75% of final position at current prices. Monitor what happens at $54 closely to see what happens. If it turns south and goes below $31 for a week or two, the uptrend has changed and this stock could end up being more of a trading range type of stock. In this scenario, you’ll buy the lows and sell the highs.
Trulieve: When to Buy or Sell this Cannabis Stock
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