Sundial Growers (NASDAQ:SNDL) stock is poised to go higher if the bullish indicators go by. Shares of the cannabis producer have been under pressure for almost a year. However, the trading price of the stock is increasing, and people are starting to jump on the bandwagon.
The United States House of Representatives has approved a bill that would decriminalize cannabis use at the federal level. As you can see from the chart below, it had a substantial impact on SNDL stock. However, the company has given away gains sharply in the last few days. However, the bulls have had enough, and we see a rearguard action.
The chart shows a cup and handle pattern forming. A Cup and Handle chart pattern resembles a cup and handle where the cup is in the shape of a “U,” and the handle has a subtle downward drift. The pattern is a bullish indicator. It provides the opportunity to go long with the hope of an extended rally ahead.
At the end of the chart, you can see a bullish hammer. A hammer candlestick pattern consists of two large figures, two small dots, and wicks that extend from the top to the bottom. It happens when there is a reversal in trend, which may mean that a stock has reached its bottom. Therefore, these are all important indicators to keep in mind moving forward.
Is SNDL Stock a Buy, Hold or Sell?
Cannabis legalization is sweeping over North America. The legalization of cannabis has been a controversial topic across the globe, with many people still against it.
While cannabis is becoming increasingly legal in North America (some U.S. states, Canada, etc.), it remains illegal under federal law in the United States. This means that some restrictions on cannabis use and possession remain in place. However, recent events are positive catalysts for SNDL and other cannabis stocks worldwide.
It was exactly the kind of announcement SNDL is looking for. It recently announced a delay in the release of its latest quarterly figures.
Meanwhile, the Canadian cannabis producer is acquiring companies to increase its range of offerings. However, the most interesting acquisition for a layperson might be the merger with Alcanna, a liquor retailer and premium spirits producer. Alcanna is Canada’s largest physical retailer of private-label liquor, with 171 locations in provinces across the country.
Therefore, Sundial is getting its house in order. In the third quarter, investors saw the company authorize a 100 million CAD share repurchase program and post net earnings of 11.3 million CAD. Sundial CEO Zachary George has said that one of the company’s financial goals is to have a positive cash flow by 2022. All in all, The company is in for a big year, making SNDL a buy in my eyes.
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On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.