2018 is turning out to be a pivotal year for Choom Holdings Inc. (OTCMKTS:CHOOF) (CNX:CHOO), as the company appears to be firing on all cylinders right from business execution to performance in the stock market. The stock is already up by more than 150% and showing signs of continuing to climb higher.
Solid fundamentals, in recent months, appear to have strengthened investor’s confidence in the company’s growth prospects as well as sentiments in the market. With the stock currently trading in a strong uptrend, any pullback should act as buying opportunity for betting on further movements on the upside.
When it comes to price action, the stock faces immediate support at the $1.03 level on any pullback, below which it could drop to the $0.81 level, seen as the next critical support level. On the upside, immediate resistance is at the $1.13 mark, which happens to be the stock’s 52-week highs. A rally followed by a close above the critical resistance level should open the door for the stock to continue powering high.
Why is Choom Holdings Rallying?
Investor’s sentiments appear to have spiked higher on Choom Holdings announcing 10 additional Cannabis retail opportunities in Alberta and British Columbia. The company has already secured rights to an additional 7 retail locations in Alberta, which will supplement its 25 leases in highly strategic and secure locations in the city. In British Columbia, the cannabis company has secured 3 additional retail leases.
The new retail locations mark a significant milestone in the company’s push to be a leading private cannabis retailer in the country. The new locations should allow the company to reach a broader target market, expected to lead to more revenues in the future.
“Market share and customer acquisition in the upcoming recreational landscape will be very difficult to come by; these applications are key to Choom’s retail strategy. Choom’s brand was created exclusively for the recreational market, core to our values is cultivating a great experience for the consumer and part of this strategy is retail distribution,” said CEO Chris Bogart.
Pursuit of strategic retail locations is an important play as this will allow the company to reach a wider market with ease, and at reduced costs. Increased sales in one way or another should also help shore up the company’s bottom line which explains why investors are happy with the stock, thereby pushing it up the charts.
$10 Million Capital Raise
Choom Holdings remains well positioned to accelerate the execution of its unique retail strategy after raising $10.1 million in a non-brokered private placement. The fact that Aurora Cannabis Inc. (OTCMKTS:ACBFF) was the biggest investor in the placement all but provides another layer of credibility on the company’s long-term prospects.
Aurora cannabis investing inversing $7 million indicates that the giant cannabis company believes in Choom Holdings growth prospects in the fast-growing business. The company plans to use the funds to expand its production and retail footprint as it looks to pursue more opportunities across the country.
Choom Holdings has every right to succeed given the proven business model it is operating under as well as the new capital injection it has received. Expansion of the retail footprint should allow the company to generate more sales expected to further strengthen the bottom line. As it stands, the stock should continue to climb higher on improved fundamentals.
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