Relative Weakness Keeps Cannabis Stocks in Limbo

 

Another frustrating day for cannabis traders who are leaning bullish. From the open, relative weakness was on display, and it never really let up. This wasn’t a sudden breakdown or a surprise move late in the session, it was a slow, persistent bleed that played out all day long.

Above, I’m looking at a 5-minute chart of MSOS, with the SPY below it for comparison. The key moment for me was at point B. While the SPY pushed to a new high, MSOS couldn’t follow. That’s textbook relative weakness. When the broader market is making higher highs and your group can’t even keep pace, that’s a warning sign. It tells you buyers aren’t as motivated, and sellers are more than happy to use strength as an opportunity to unload.

Once short-term support gave way, the selling accelerated and carried pretty much into the close. There was no meaningful bounce attempt, just steady pressure. Days like this are tough psychologically because nothing dramatic happens,  the stock just quietly does the wrong thing all session long.

Shifting to the daily chart on the right, today’s candle tells a slightly different story. The range was relatively small, and price remains trapped in a tight four week consolidation. Despite all the intraday frustration, we’re still chopping sideways. That’s important context. This market isn’t breaking down, but it’s also not breaking out. It’s waiting.

And we all know what it’s waiting for: clarity on cannabis rescheduling. With just four trading days left until the end of January, that update could drop at any time. That uncertainty explains the compression we’re seeing. Traders are hesitant to commit aggressively in either direction without a headline.

I can’t help but think back to August, when we were told “just a few more weeks.” Those few weeks quietly turned into four more months. Yes, we eventually got the executive order signing, but the waiting was brutal. I really don’t want to see four more days turn into something longer again.

For now, patience is the only real edge. Until relative strength shows up and price escapes this range, frustration is simply part of the trade.

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