TLRY: A Case Study in Relative Weakness

 I received a few emails today asking why I sold part of my TLRY position, so I figured I’d give a quick update for anyone who’s interested and maybe clear up my thinking a bit. This wasn’t an emotional decision or a sudden change in my overall view of the cannabis space. It was simply a response to what the chart was telling me.

If you look at the 5-minute chart of TLRY above, with MSOS in the lower pane, the relative weakness really stands out. Yesterday, MSOS made a much higher high at point B compared to point A. That’s exactly what you want to see when momentum is improving. Now, if TLRY were acting well, you would expect it to do the same thing at the very least, make a similar higher high. Instead, TLRY did the opposite. At point B, it put in a much lower high. That divergence is classic relative weakness, and it immediately put TLRY on my radar.

That said, noticing relative weakness doesn’t automatically mean I hit the sell button especially on a lower time frame such as a 5 minute. I try not to front-run breakdowns. As long as support is holding, a weak stock can still snap back, especially in a sector that’s prone to sharp reversals. That’s why I didn’t sell anything yesterday, even after spotting the divergence. I wanted to see how price behaved at a key level.

This morning gave me my answer. On the open, TLRY broke short-term support, and that was my signal to act. I sold roughly one-third of my position, not because I think TLRY is “done,” but because the risk/reward shifted. When a stock shows relative weakness and then loses support, I’d rather play some defense than just sit there and hope.

My mindset with this trade is simple and flexible. If daily support holds and TLRY turns back up with improving volume and strength, I can always add those shares right back on. There’s no rule that says once you sell, you can’t buy again. I’d much rather re-enter on confirmation than stubbornly hold through a drawdown just to prove a point.

Looking at the daily chart now, TLRY is once again approaching gap support. This is an important area, and how the stock behaves here will tell us a lot. If buyers step in and defend this zone, the recent weakness could end up being nothing more than noise. If it fails, then selling that partial position will have been the right call.

For now, I’m watching closely and letting the chart do the talking.

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