Tilray approaching a swing trade and/or shorting opportunityNASDAQ:TLRY is approaching a resistance range and is at the top of a W pattern. It's rsi is also overbought above the 70 level. Volume is also trending upwards and has reached the level where the previous volume high (and price trend reversal) was.
The trading opportunity is around the 3 scenarios shown in the chart, with, due to the technical indicators mentioned above, scenario 2 and then 3 being the most likely.
Trading approach would be to wait until after the quarterly earnings are released and see if:
Scenario 1
The price breaks above the resitance range, apply a 3 day filter to ensure it's not a fakeout, and swing trade upwards to approx. $3.
Scenario 2
A more likely scenario, the price starts to decline and enter then enter into a short with a take profit at $1.60. Exact entry point for the trade might be difficult to determine, especially as the previous moves in price have been so explosive that there may not be an optimum tim eto enter, thus shorting would be a higher risk trade.
Scenario 3
Wait until the price reaches the support level since November 2023 (approx. $1.6) and enter a swing trade back up to the resistance range with an exit at approx. $2.5. To reduce risk, enter the swing with a combination of the RSI being at 30 and/or a 3 day filter to reduce the risk of the price breaking down from $1.6 to a new low.
Scenario 3.5
Same as scenario 3 but with the support level being around the DMAs and price range where the price movement faced some resistance on it's way up during mid-March 2024. A more likely scenario, the price starts to decline and enter then enter into a short with a take profit at $1.60. Exact entry point for the trade might be difficult to determine, especially as the previous moves in price have been so explosive that there may not be an optimum time to enter, thus shorting would be a higher risk trade.
NOTE:
Those with a risk appetite large enough may use the technical indicators mentioned in the first paragraph as enough of a comfirmation to enter a risky short trade:
Entry point: Now ($2.45)
Stop Loss: $2.70
Take Profit: $1.60
Risk:Reward ratio: 1:3
