MedReleaf Corp (TSE:LEAF) Bucking Cannabis Sector Weakness; Technical Breakout Possible

Benjamin A. Smith

MedReleaf Corp (TSE:LEAF) (OTCMKTS:MEDFF) is firing on all cylinders—from a price action perspective. The medical marijuana premium products provider and LP is currently immersed in a very pronounced reverse correlation between its share price and the sector at-large. Should trends continue, LEAF could be on the precipice of a significant move higher.

MedReleaf Corp CEO Neil Closner discusses his company’s recent developments on the international cannabis stage.

By simply gleaning a MedReleaf daily chart, this observation becomes self-evident. As the chart inscriptions below indicates, it sure appears LEAF is one of the few Canadian cannabis companies not embroiled in technical bear market conditions at the present time:

For starters, MedReleaf is among the few cannabis stocks trading above its 50, 100 and 200 simple moving averages. It is impossible to be technically sound without that reality in place. They join The Hydropothecary Corp as the only current major Canadian-focused issue to share this reality. Previously, Canopy Growth had shared this distinction with MedReleaf back in early April—and briefly just last week—before succumbing to recent selling.

However positive trading above well-followed moving averages are, it means little if there’s scant volume backing it up. This is not the case with MedReleaf currently.

Today’s volume is on pace to surmount 12-week highs, on no announced news. This would generally be considered a very bullish development. Prices have broken and retested the 50-Day MA, with much of the volume occurring at the top of the recent range. Ultimately, MedReleaf of among the few cannabis stocks which has held onto Trump rally gains, bucking widespread sector price erosion.

Taking a closer look at the action, MedReleaf is facing stiff resistance in the $20-20.25/share range. Ultimately, the question is whether bulls have enough strength to move the needle higher after a 30-plus percent run since April 10. As we can see from the volume profile below, someone has positioned themselves for profit taking or a sizable move forward.

If MedReleaf is to break glass ceilings, volume can’t let-up here. Overall, this is Day 8 of a broader narrowing consolidation pattern, which should have some legs to it in either direction.

It’s worth noting that MedReleaf remains a favorite of some very smart people on Bay St. Recently, Canaccord research analyst Matt Bottomley singled-out MedReleaf as a top personal favorite of his. He elucidates his current thoughts in the video below.

Canaccord Genuity Research Analyst Matt Bottomley discusses the U.S. cannabis investing landscape and top Canadian cannabis picks

Midas Letter will continue to cover MedReleaf’s investing profile as events warrant.

Benjamin A. Smith

Benjamin A. Smith

Ben is a research analyst and capital markets professional with nearly 20 years of experience. His areas of expertise are broad-based, and include extensive knowledge of macro economics, stock/derivative trading, commodity complexes, cryptocurrencies and technical/quant analysis. He also maintains an particular affinity for U.S. politics and the macro-regulatory environment facing...
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