Will History Repeat Itself for TLRY This July?

 

Above is a monthly chart of TLRY, and as you can see, this has been one of the weakest cannabis stocks in the group. All year long it has displayed relative weakness compared to MSOS, which has spent most of the year moving sideways rather than trending lower. That relative weakness is the main reason I threw in the towel on TLRY several months ago. I simply didn't see a reason to stay invested when there were much stronger opportunities elsewhere in the sector.

Having said that, we're now approaching a very interesting time of year for TLRY from a seasonal perspective.

Historically, July has been TLRY's strongest month. Based on the data we have, the stock has rallied during July roughly 71% of the time. Now, it's important to keep this statistic in perspective because TLRY has only been trading since 2018, so we're working with a relatively small sample size. Even so, July clearly stands out as its most bullish month, making it a seasonal tendency that's worth paying attention to.

Another thing that caught my eye is the monthly chart itself. In recent years, whenever TLRY has managed to take out the high from the month of June, it has often followed through with a respectable rally. There's certainly no guarantee history repeats itself, but it's a pattern that has shown up enough times for me to keep it on my radar.

At the moment, I don't own any shares of TLRY, but I'm beginning to entertain the idea of getting back in if the technical picture starts improving. As many of you know from my post last week, I'm already bullish on MSOS. If MSOS begins a meaningful advance, there's a good chance the rest of the cannabis sector will participate as well. After all, you've probably heard the saying, "A rising tide lifts all boats."

That doesn't necessarily mean TLRY is my favorite cannabis stock. In fact, I still believe there are stronger names in the group, including GTBIF, CURLD, and TRLV  which have shown much better relative strength over the past several months. However, one thing I've learned over the years is that when TLRY finally starts moving, it can catch fire in a hurry. The stock has a history of making explosive moves once momentum returns.

What also makes this setup attractive is the current monthly trading range. Price has been consolidating in a relatively tight range, which helps define risk while leaving the door open for a potentially attractive reward if cannabis stocks begin their next leg higher.

I'll be watching closely to see if this seasonal pattern plays out once again. Let me know what you think in the comments.

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