Well, MSOS has finally done something it hasn’t been able to do in over a week, it took out a previous day’s high after printing six consecutive lower daily highs. If you’ve been following along, you know I’ve been stalking this trade and writing about it for several days now, waiting to see if the character of the price action would finally change.
Looking at the market through the lens of relative strength, today offered an early tell well before MSOS pushed through the closely watched 4.87 level I’ve been referencing. On the left chart, I’m looking at a 2-minute chart of MSOS, with SPY plotted in the lower pane for comparison. Around 10:12 ET, SPY pushed down to a fresh low on the day. MSOS, however, refused to follow. Instead of making a new low, it put in a much higher low. That divergence immediately caught my attention.
That’s classic relative strength. When the broader market is making new lows but a stock or ETF holds firm, it tells me buyers are stepping in and asserting control. That’s something we simply haven’t seen in MSOS over the past seven trading days. The tone had clearly shifted. Once MSOS broke above the 4.58 intraday high, momentum picked up and price pushed as high as 4.89 before pulling back, eventually closing the day at 4.71.
On the right, the daily chart shows why today matters. In my opinion, we may have finally turned the corner and started carving out some kind of bottom. Daily volume did tick up slightly, which is constructive, but I’ll be honest, I wasn’t impressed with the close. Ideally, I would have liked to see MSOS finish much closer to the $5 level to really drive the point home. We didn’t get that.
Adding to my hesitation was the action in other cannabis names. TLRY, CGC, YCBD, SNDL, and VFF all showed signs of weakness today. So while the day started with encouraging signals and a strong relative strength setup, the lack of follow-through late in the session left me cautious.
For now, the message is mixed. The early strength was real, but the close leaves questions unanswered. We’ll see how things unfold tomorrow.
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