Above is a daily chart of CURLF, and in the lower pane I’m using a ratio line of CURLF versus MSOS to measure relative strength within the cannabis space. Right away, the first thing that stands out to me is the strong support level that CURLF has just bounced from, and I think that level is the key to the entire setup.
Back in November, CURLF found support just under the $2 area, and now we’re seeing buyers step back into the stock at that same level once again. I always pay close attention when a stock reacts positively at a prior support zone because it tells me that the market still recognizes that area as important. When a level has already proven itself in the past and then works again later, it tends to carry more weight in my analysis.
What I like here is not just the bounce itself, but the way the bounce is happening. We’re now seeing three above average sized green candles come off that support area, and that’s not something I ignore. Strong candles like that often tell me buyers are stepping in with conviction rather than just creating a weak dead cat bounce. To me, that kind of price action suggests demand is returning in a meaningful way.
The lower pane is also giving me a very important clue. As CURLF was retesting support, the ratio line versus MSOS was actually showing bullish divergence. In other words, while price was coming back down toward that support level, the stock was quietly beginning to outperform the broader cannabis ETF. That’s something I always find encouraging because it can often be an early signal that the stock is beginning to strengthen beneath the surface before the price chart fully reflects it.
What makes this even more interesting is that the ratio line now looks like it’s on the verge of breaking out of its consolidation before price does. That’s exactly the kind of pattern I like to watch for because relative strength often acts as a leading indicator. When I see the ratio line improving ahead of a clear price breakout, it tells me that buyers may already be positioning in anticipation of a larger move.
Of course, I still want to see the cannabis sector continue to improve overall. If MSOS can keep moving higher and the group starts to gain momentum, I think CURLF has a very good chance of emerging as one of the stronger names in the space. It’s already showing the kind of relative behavior I want to see in a potential leader.
For that reason, CURLF is definitely one I think is worth watching here. It’s sitting on proven support, showing strong buying pressure off the lows, and beginning to outperform its sector. In my opinion, that combination gives it the potential to become one of the leaders if the cannabis trade continues to develop.
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