Trulieve Declines w/ Cannabis SectorTrulieve lost -$2.79(-5%) on the day with a closing price of $50.96/share. Price saw an 11% swing from high to low today(candle wick to candle wick) with price closing in the upper 50% of the day's trading range. Short-term support can be watched for at the $47.90 level which was the low for the day. A hold above that low is critical going into the end of the week, should that low be taken out price will likely see a further decline down to the $39.26 level which was where the last low in price was made prior to the rally to $60. This represents the last area of strong demand from traders meaning a hold above that level now would indicate that traders are still bullish on price above $40. The daily price candle also closed green which indicates that the short-term momentum behind price remains bullish.
The first lower indicator below the chart is the Price Percent Oscillator(PPO). This indicator is currently showing the green PPO line declining below the purple signal line which indicates short-term bearish momentum behind price. Both lines remain above the horizontal 0 level though which is the long-term momentum level to watch. Both lines above the 0 level indicate bullish momentum behind price in the intermediate-term while both lines below 0 indicate bearish momentum in the intermediate-term. The way to read the indicator right now is as it showing a short-term pullback inside of an overall uptrend in price, aka a ‘bullish pullback’.
The Average Directional Index(ADX) shows the purple directional line with a recent cross above the green directional line which indicates a short-term shift to bearish momentum from bullish. For the bearish trend to be considered strong, the histogram bars behind the would need to show a series of purple bars that progressively increase in size which for now only shows today’s recent crossover to bearish. A strong reversal to the upside in price tomorrow or Friday could easily flip this indicator bullish again, but for now the ADX is showing a shift to a bearish trend in price.
The Traders Dynamic Index(TDI) shows the yellow line((RSI(Relative Strength Index)) in a steep decline which indicates steady bearish momentum behind price. The yellow RSI line has also crossed below the lower blue line which is the lower Bollinger Band of the RSI. This represents price momentum making a 1.618+ standard deviation from the 20-day momentum average(center blue line) and is a bearish volatility indication. In general, you want to stay short or stay out of a stock when the yellow line is below the lower blue Bollinger Band line as the momentum and volatility favor the bears. The yellow RSI line is also testing the middle dot plots at the 50 level which is the center of the total RSI range(0-100). A yellow RSI line above 50 indicates bullish price momentum in the intermediate-term while an RSI reading below 50 indicates bearish price momentum in the intermediate-term. For now the move is to wait for the yellow RSI line to rise back above the lower Bollinger Band before considering this indicator bullish.
Overall, price is still looking good on a long-term basis with weakness in the short-term expected. From a trend trading perspective, a move above resistance at $60.91 is needed in order for price to gain traction in the uptrend, while a move below $39.26 would indicate that a new bear trend is likely forming in price. That $39.26 level is the most important to watch going forward if the decline in the cannabis sector continues.
