We’ve been offering some mid-term analysis for main cannabis stocks and now it’s High Tide’s turn. The occasion couldn’t be better, since the stock recently surged 21% in the previous rounds.

This price jump signals a bullish resurgence for the cannabis-focused retailer. Trading around $3.55 as of Monday Dec. 2, the company's shares have seen a notable upward trend, buoyed by high trading volumes and critical resistance level breakthroughs.

Let’s take a closer look.

Volume Drives Breakout

Recent trading sessions have been characterized by a sharp increase in volume, with 856,995 shares traded during the most recent rally. High trading volumes often signify strong investor interest, and for High Tide, this increase has aligned with significant price milestones. This volume surge underscores a shift in market sentiment, reflecting heightened confidence in the stock's potential.

The breakout above the $2.58 resistance level – a point previously tested and rejected in May -marks a turning point.

After consolidating over the summer months, High Tide's stock gained enough momentum to overcome resistance in late October, turning it into a new support level. The sustained move above $2.58 shows strong underlying demand.

Chart created using Benzinga Pro

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Testing And Breaking Key Levels

The rally didn't stop there. High Tide's stock tested another major resistance around $3.00–$3.10 during November, successfully pushing past it to reach its current trading range. At $3.55, the stock is now facing its next challenge, with Fibonacci retracement levels suggesting $3.58 as a critical threshold.

Should it break and hold above this level, potential targets are $4.00 and $4.50 considering the 2021 price action, but since there’s been a lot of changes since then and the cannabis sector has consolidated, the stock price action looking forward might behave as price discovery.

RSI Indicates Overbought Conditions

While the stock's momentum is evident, Relative Strength Index (RSI) warns of possible short-term pullbacks on the daily chart. With an RSI of 75.62, High Tide's stock is already at overbought territory, suggesting a cooling-off period may be on the horizon.

Chart created using Benzinga Pro

However, the elevated RSI also highlights strong buying interest, which could limit any corrections to shallow dips.

Market Outlook For High Tide

Looking ahead, traders should look at the $3.55–$3.58 resistance zone for signs of a sustained breakout.

Again, High volumes during upward price movements suggest that the current rally is backed by solid market interest. The stock has been on an upward trend since April, something shared by other cannabis stocks, as fundamentals seem to be backing the rise on prices.

2021 all-time highs seem far away still while the market is drawing a renovation circle with redefined resistances and supports. As for the later, $3.00 and $2.58 serve as crucial support levels, with any break below these potentially dampening the bullish trend.

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Investment Considerations

For short-term traders, High Tide’s ongoing momentum presents an opportunity to ride the upward wave, with tight stop-loss orders recommended to manage risk.

Long-term investors may consider accumulating shares on pullbacks, particularly if the stock finds support at $3.00 or $2.58. The company's recent performance reflects resilience making it an interesting case for both retail and institutional investors.

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Cover: AI generated image/Benzinga Pro