What a great day for MSOS, which pushed to a new high for the year and gave us a textbook example of how powerful relative strength can be when it shows up at the right time. Days like this are exactly why I spend so much time watching how a stock or ETF behaves relative to the broader market, not just in isolation.
Above is a 5-minute chart of MSOS, and in the lower pane I have SPY for comparison. For most of the morning and well into the lunch hour, SPY was trending lower. Sellers were in control, and the general tone of the market was weak. Under normal circumstances, you would expect most ETFs to follow along. MSOS had other plans.
Instead of breaking down with the market, MSOS was quietly making higher lows. That divergence immediately caught my attention. While the market was leaking lower, buyers were consistently stepping in earlier on each pullback in MSOS. That’s a subtle but important clue that demand is overwhelming supply, even in a bearish market environment.
The setup became even more compelling when MSOS pushed up to 6.09, which also happened to be yesterday’s high. Now we had a clear reference level. Prior highs often act as resistance, and when price can lean on that level without backing off, it tells me pressure is building. MSOS spent time consolidating just beneath that level while SPY continued to struggle.
Right around 1:00, the divergence really paid off. SPY made another push to a new low, but MSOS did the exact opposite. It pushed to a new high, breaking out of the consolidation and clearing that prior resistance. That’s the moment I want to be involved,
From there, MSOS went on to rally beautifully into the close, rewarding anyone who recognized the relative strength early. This was a clean, high confidence breakout that didn’t require prediction, just observation. To me, it’s a wonderful example of how relative strength can lead price and point you toward the best opportunities, even on days when the broader market is working against you.
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