As most investors in Isodiol International Inc (CNSX:ISOL) (OTCMKTS:ISOLF) (FRA:LB6A) are aware, potential game-changing news is scheduled to be released sometime tomorrow. In anticipation of the event, Midas Letter takes a look at the stock’s technical take and other pertinent tidbits which could have a material effect on price.

To briefly recap the present situation, the Investment Industry Regulatory Organization of Canada (IIROC) halted of Isodiol International on April 10 “pending news”. While that in itself isn’t unusual, the company took the additional step of “clarifying” that the current halt was based on a management request pending “material” news. Furthermore, the halt renders Isodiol trading activity dark for at least five straight trading sessions—a unusual amount of time as far as trading restrictions go. These events have fueled chatter that hyper-major material news is brewing.

As we highlighted last week, Isodiol International has never seen its stock halted going back to June 9, 2017, when the company officially changed its name (and ticker) from Laguna Blends Inc. This, despite numerous material company announcements which could be considered ‘halt-able’ events.

As the resumption of trading rapidly approaches on or before April 17th, 2018th, we take a look at relevant statistics to provide some context on past high-volume trading days, and important technical levels which may come into play depending on the nature of the release.

Isodiol International – Top 5 Most Active Days By Volume

Date Open Close Change Change % Low High Volume Dec 04 2017 1.86 1.7 0.01 0.59 1.55 2.14 30,195,006 Nov 21 2017 0.99 0.98 0.08 8.89 0.91 1.23 25,824,944 Nov 15 2017 0.495 0.62 0.185 42.53 0.465 0.72 22,993,013 Nov 27 2017 1.2 1.58 0.51 47.66 1.2 1.58 16,371,039 Nov 28 2017 1.8 1.58 0 0.00 1.27 1.81 15,280,740

Not surprisingly, the highest volume trading days occurred during the stock’s breakout phase from mid-November to early December 2017. That period also coincided with copious amounts of company news, climaxing with ISOL’s binding agreement to acquire 100% stake in Be Trū Organics.

The aforementioned news event actually wasn’t released until 3:21pm EST on Friday, December 1, leading to a delayed trading impact. It wasn’t until the following Monday that Isodiol reached its volume apex—roughly 30.2M shares traded. Shares gapped higher, eventually closing net even as exhausted buyers weren’t willing to push prices higher. Prior to the news, Isodiol had appreciated approximately 800% in the month prior.

Largest Short Positions, Canadian Securities Exchange

Company Name Symbol 31 Mar 2018 15 Mar 2018 Net Change % Change % Total Traded Value N Namaste Technologies Inc. 15,752,080 25,613,582 -9,861,502 -62.60% 26.44 HIKU Hiku Brands Company Ltd. 7,693,233 12,780,171 -5,086,938 -66.12% 38.275 MARI Maricann Group Inc 7,523,473 7,921,922 -398,449 -5.30% 28.617 CRZ CannaRoyalty Corp. 7,031,404 5,207,138 1,824,266 25.94% 41.068 ISOL Isodiol International Inc. 6,379,885 8,042,695 -1,662,810 -26.06% 25.986

According to invaluable source ShortData.ca, Isodiol International is the fifth largest short position by trading value on the Canadian Securities Exchange (CSE). About $6,379,885 net value of company shares are currently short as of March 31 – a 26.06% decline from March 15. With prices mostly well above $1.00/share until recently, I estimate the total aggregate short position is somewhere around 5M shares or below.

Given that Isodiol currently has 287,528,191 shares outstanding, the current short position is a relative drop in the bucket. Thus, I don’t expect short covering will drive price action tomorrow beyond the opening few minutes—assuming the news is positive.

Technical Take

Depending on the news itself, ISOL technicals may come into play. If there’s a buyout pegging the value of ISOL shares to the acquiring company, the technicals will be of limited value. However, if Isodiol announces a major distribution, licensing agreement or other material news which isn’t a game-changer per se, the technicals become more relevant.

From my perspective, ISOL has three clear upside resistance zones. The first constraint is the 50/100-Day MA, which lies smack in the middle of a descending consolidation zone stretching from the December highs. Should this clear, the $1.50-1.60 share area encompassing the March swing highs to the December gap-down lows provide the next resistance zone. Finally, if the bulls overtake $1.60 on strong volume, there’s not much technically meaningful resistance until the all-time highs at $2.10/share. Of course, the historical high also coincided with ISOL’s high trading volume day on December 4th.

As always, volume will be the key here. Investors have has a week to contemplate ‘what if’ scenarios, and the daytrading crowd—smelling potential large swings in volatility—will be circling ISOL like a hawk. Depending on the news, all the ingredients are aligned for an historic price/volume/volatility event. At least, that’s the expectation among many.

As such, record volume should support higher prices, while lower volume (i.e. less than 30M shares) will likely bound prices within the broader December-April consolidation phase. If you’re an investor in Isodiol International—assuming the news released is positive—you’ll be hoping aggregate volume smashes the December 4, 2017 high water mark.

Whether there’s buyout or partnership agreement tomorrow, joint news with Aphria Inc. (as some are speculating) or something totally off-the-radar, Midas Letter will be providing updates as events warrant.

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