What Happened to TLRY While MSOS Bounced?

 

What happened to TLRY today? That was the question I kept asking myself as the session unfolded. We finally saw a little bit of life in MSOS today, yet TLRY continued to move in the opposite direction. Instead of participating in the bounce, it showed clear signs of relative weakness, and the intraday action made that obvious if you knew where to look.

On the chart to the left, I’m looking at a 2-minute chart of TLRY, with a 2-minute chart of MSOS below it for comparison. Around 1:30 ET, MSOS pushed to a new high on the day. That should have been an invitation for TLRY to at least attempt a higher high of its own. Instead, TLRY failed to confirm the move and printed a lower high. That divergence immediately stood out to me as a textbook example of relative weakness.

When a peer or sector ETF is making new highs and a stock can’t keep up, that’s usually a warning. Sure enough, once minor intraday support gave way, TLRY rolled over and began trending lower for the rest of the session, ultimately closing on its low. That’s not the kind of behavior I want to see when I’m looking to add exposure.

To be clear, this wasn’t easy to watch. I’m actually long TLRY from the summer lows, and my intention has been to add to that position when the conditions line up. Unfortunately, today’s relative weakness clearly told me the stock isn’t ready just yet. The market was giving us information, and ignoring it would be a mistake.

Looking at the daily chart on the right only reinforces that caution. TLRY appears to be working its way toward a gap fill that extends down to the 8.43 area. Today also marked the seventh consecutive session of lower daily highs, which tells me sellers are still firmly in control of the trend.

My game plan hasn’t changed. I’m not interested in guessing bottoms. I want to see TLRY take out a prior day’s high or start showing clear signs of relative strength versus MSOS before stepping in again. Until then, this remains a bounce watch name for me. We’ll see what tomorrow brings.

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