Kali Inc (OTCMKTS: KALY) is trading at a crucial juncture after underperforming for the better of the year. The stock has shed more than 60% in market value and is currently struggling for direction at a crucial support level.
OTCMKTS KALY Price Action Analysis
The stock trading sideways comes on the heels of Kali expanding its footprint into Africa in pursuit of opportunities for growth.Â In partnership with PURA, the Company has also expanded its product line with the unveiling of new CBD-infused products to cater to the diversified cannabis marketplace.
The confirmation that Kali is targeting sales of as much as $1 million in 2019 was expected to have a positive impact on the stockâ€™s price action activity. However, that has not been the case as the stock has continued to edge lower.
Kali is currently trading at the $0.01 support level and susceptible to further drops given that the short-term momentum has turned bearish. Above the critical support level, the stock is likely to bounce back after the steep correction.
However, breach of the support level on the downside could result in the acceleration of the sell-off wave that could result in the stock plunging further.Â For the stock to turn bullish, then it will have to rally and take out the $0.02 resistance level.
What Does Kali Do?
Kali is engaged in the development of cannabis-infused treatment for addressing various medical conditions such as chronic pain. The Company is also engaged in the distribution of cannabis extracts, health, and other wellness products.
While Kali has underperformed the overall cannabis sector, the Company has completed a string of strategic initiatives that affirm its long-term prospects.Â In the recent past, the Company has expanded its footprint into Africa with the availing of EVERx CBD Sports Water in South Africa.
In partnership with its strategic partner Puration Inc (OTCMKTS: PURA), the Company has successfully secured an initial order for or the sale of EVERx CBD water. Expansion into Africa should go a long way in diversifying the Companyâ€™s revenue streams, consequently reducing reliance on a particular market.
Expansion in Africa comes at a time when Kali remains confident of generating sales of as much as $1 million for the current fiscal year. The projected sales target is supported by the belief that CBD sales market will balloon to highs of $22 billion over the next three years.
Strengthening Product Line
In addition to coming up with cannabis products, Kali has also expanded its toes into the Cannabis extracts business. Supported by a patented cannabis extraction process, the Company is planning to target the $170 billion cannabis extracts markets.
â€śKALYâ€™s consumer revenue strategy offers a business line that can stand alone, but one that also provides KALY with the long-term staying power to take the necessary time to bring its cannabis extract biopharmaceutical products to market,â€ť Kali in a statement.
The Company has also entered into a strategic partnership with Nouveau as part of an effort of coming up with proprietary cannabis cultivar in a bid to enhance the quality of extracts.
The Company already boasts of a robust pipeline of non-pharmaceutical CBD infused products that further strengthen its prospects in the multi-billion industry. It sales itâ€™s CBD infused candies under the brand name Hemp4mula, which are also supported by CBD infused sunscreen and HempTantation.
Late last year, the Company completed the acquisition of NCM Biotech. The acquisition of the biopharmaceutical company all but enhanced Kali prospects on the discovery, development, and commercialization of novel therapeutics from a proprietary cannabinoid product platform.
â€śIn four years of operations, the Company has established a leading position in the development of plant-derived cannabinoid therapeutics through a proven drug discovery and patented development process. The resulting intellectual property portfolio and the established regulatory and manufacturing expertise have created a significant opportunity,â€ť Kali in a statement.
Amidst the underperformance in the market, Kali has continued to strengthen its core business as it eyes long-term growth. Expansion of the product line should go a long way in helping the company target various facets of the cannabis market.
The Company has also strengthened its cannabis production capacity and enhanced its cannabis extraction operations. Expansion into Africa in pursuit of new sales channels is another development that affirms the Companyâ€™s long-term prospects as it eyes revenues of as much as $1 million in 2019.
That said the stock is likely to bounce off the critical support level.
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Disclosure: We have no position in KALY and have not been compensated for this article.