Wall Street seems to have got cannabis fever as the stock price of Tilray ($TLRY) shot to the moon. Since its public offering in June this year at a price of $17, it reached levels short of $300 this week.
Percentage-wise, the parabolic rise reminded everyone of the Bitcoin surge that culminated with the cryptocurrency reaching the 20k landmark. Comparisons already appeared in the financial community, but the big question is why a pot-stock company is no worth more than American Airlines ($AAL)?
As the first Canadian cannabis producer to go public, the company’s revenues are just shy of $20 million last year, but the perspective looks brighter: Canada is about to legalize marijuana next year.
Moreover, a mind-blowing help came from the United States. The DEA (Drug Enforcement Administration) just signed off to use $TLRY imported marijuana in the United States for medical research. Needless to say, the stock rocketed 30% on the news, and its volatility reminded every one of last year’s crypto frenzy.
Speaking about the crypto market, Bitcoin forms a dangerous technical pattern. It found strong support at the $6000 landmark, but the bounces were aggressively sold.
Moreover, it made a series of lower highs, while putting pressure on the $6k level. Without breaking that series, the path of least resistance seems to the downside, with $5000 or lower in focus.
Such a move will put many miners out of business, so if there’s one reason why the $6k level holds for such a long time, this might be it. The law of supply and demand will resolve the Bitcoin puzzle sooner, rather than later.
As for the Forex market, the JPY pairs seem to have awakened. USD/JPY and EUR/JPY lead, with CAD/JPY, also trending bullishly. The big question is how the stock market in the United States will react to next week’s FOMC Statement and staff projections, as the JPY pairs depend on the stock market’s evolution.
For now, the bullish bias continues, with 116 as a reasonable target for the USD/JPY in the medium term.