iAnthus Capital Holdings Inc Displaying Notable Relative Strength

Benjamin A. Smith

iAnthus Capital Holdings Inc (CNSX:IAN) (OTCMKTS:ITUHF) (FRA:2IA) is displaying interesting relative strength that’s getting hard to ignore. Stock price in the emerging multi-state vertically integrated cannabis producer and retailer has increased ↑10.82% over the past three sessions, without an overt catalyst driving the bid. We explore further.

Heading straight to the charts, the out-performance becomes clear on multiple fronts. Beginning with the 50-Day simple moving average—a widely-watched relative momentum indicator—iAnthus has held strong in the face of moribund sector performance. Prices have tested and bounced on three separate occasions, maintaining the integrity of the overarching bullish impulse which began in mid-April. I can’t recall another stock in the entire cannabis universe that can make this claim. The bullish “50” hold is backed by solid and improving peripherals, including a notable positive swing in standard period MACD levels. Volume is expanding and testing 1-month highs during this mini-run.

Furthermore, iAnthus is scorching other vertically-integrated cannabis peers in decidedly convincing fashion. Since July 30th, MedMen Enterprises Inc. has essentially tread water over the past three sessions, while Green Thumb Industries Inc. has done the same (although they remain under the influence of a large $80.2 million bought deal financing which closed today). Yes, we have to raise the “small sample size” flag here. Still, we’re talking about a pretty stark disparity which goes above & beyond a few percentage points.

If head-on comparisons vis-à-vis the exchange is your thing, iAnthus is showing some muster.

Since July 11th, iAnthus Capital Holdings is holding steady, down ↓0.73% versus the Midas Letter CSE Canadian Cannabis Index, which has shed ↓9.62%. Up until July 30th, the company had been mirroring underlying peer movement on the CSE quite closely. The last three sessions has changed that dynamic completely.

Final Thoughts

The key question du jour is whether iAnthus is experiencing a technically-inspired run, or whether something is brewing under the hood. The fact that iAnthus has bounced three separate times off the “50” and maintained the integrity of the overarching bullish trend may suggest the former, but that’s educated guesswork at this point.

CEO Hadley Ford talks about the change in strategy for the company moving away from royalty only, to a full service, vertically integrated enterprise

Either way, the indicators are lining-up in a favorable way, in a sector which has seen few individual names break away from the downward monolithic morass. The stock could still yet pullback and test its ascending base of support; that should depend on the overall health of the market. But if the cannabis sector stabilizes here, iAnthus is a prime candidate for upward extension.

A firm break and closing high above $6.95/share should induce a test of $7.89/share—the stock’s all-time high—in relatively short order.

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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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

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