A long descending trend line is capping further upside action, just as Australis Capital Inc (OTCMKTS:AUSAF) was starting to show signs of bottoming out after coming under pressure in 2018. The stock has been on an impressive run since the start of the year. However, as it stands, the upward momentum appears to have hit a wall.
Share Price Analysis
The stock had spiked at the back of high turnover in traded shares on the confirmation the company had acquired California cannabis brand Mr. Natural Productions. The $1.3 million purchase had reinvigorated investor confidence about the company’s push for organic growth.Australis Capital sentiments in the market had also received a boost on the commencement of trading, of the stock, in the OTCQB market. Listing on the U.S is a significant milestone as it broadens the stock’s exposure to institutional investors in the U.S.Amidst the wave of positive developments in recent weeks, the stock has pulled back from this year highs of $1 a share. The pullback could as well be attributed to investors taking profits, after one of the worst routs in 2018. AUSAF Daily ChartAfter the recent pullback, the stock is staring at critical support at $0.70 level, below which it could drop further in continuation of the long-term downtrend. For the stock to turn bullish, it needs to surge and stabilize above the $1 a share level, which is a psychological resistance level.
What Does Australis Capital Inc. Do?
Australis Capital is a venture capital firm that invests in cannabis-focused companies. The company also takes equity positions in both public and private companies. The company also eyes investment opportunists abroad in both cannabis and real estate assets.
OTCQB Listing
Australis Capital Inc. bounced back from all-time lows, on the listing of the stock on the OTCQB Venture Market. The stock is now trading in both the U.S and in the Canadian Securities Exchange. Listing in the U.S should lead to additional liquidity for Australis, given the expected influx in U.S investors.
"As we continue to expand our presence within the U.S. aggressively, the trading of our shares on the OTCQB platform is timely as we anticipate increasing interest in Australis by U.S. investors looking to align with a progressive U.S. growth company,” said Michael Carlotti, CFO of Australis.
The company has since applied for eligibility for book-entry delivery and depository services, to facilitate electronic settlements of transfers. DTC eligibility should go a long way in offering customers a convenient trading experience.
Mr. Natural Productions Acquisition
Investor’s sentiments on Australis Capital also appears to have inched higher on the company confirming a 100% acquisition of Mr. Natural Productions Inc. Based in California, Mr. Natural Productions is an award-winning medical cannabis brand.The acquisition includes rights to the life story of Robert Luciano, the brain behind Mr. Natural Brand, all intellectual property as well as the brand itself. According to Australis Capital CEO, Scott Dowty, the acquisition should go a long way in expanding the company’s footprint outside California.Plans are already underway to leverage Mr. Natural classic cannabis and rich history, to gain an international following when it comes to cannabis connoisseurs. The company’s products are currently available in Kolas dispensaries as well as dispensaries associated with CC101 in Northern California.
“Bob has perfected his methods over many decades, developing proprietary growth techniques and unrivaled efficacy. Supported by a proven playbook and thoughtful execution, Mr. Natural is uniquely positioned to become the preeminent brand of medicinal and recreational cannabis in the United States,” said Mr. Dowty.
Bottom Line
Australis Capital phenomenal run appears to have a hit an obstacle in the form of critical resistance at the $1 a share mark. Recent developments are already priced in, which explains the limited action on the upside.After the recent pullback, the company might have to serve new groundbreaking catalysts if the stock is to continue powering higher as was the case early in the year. Until then, the stock looks set to be in consolidation mode especially after the recent pullback.For interested parties, waiting for further confirmation is essential, as the stock remains susceptible to further drops as it continues to trade below the $1 a share level.We will be updating our subscribers as soon as we know more. For the latest updates on AUSAF, sign up below!Disclosure: We have no position in AUSAF and have not been compensated for this article.
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