TRLV Continues to Flex Its Relative Strength

 

Well, it’s been a few weeks since my last post on cannabis stocks, so I figured it was time to give a little update. And so far, I have to say that things are working out pretty much exactly as I had hoped.

Back on July 31st, which is Point A on the chart, I posted about the reasons I was turning bullish on TRLV. At the time, I was seeing some very encouraging signs, particularly when it came to relative strength. Since then, TRLV has put together a really impressive move.

If you look at the daily chart above on the left, you can see the beautiful rally that has taken place over the past several weeks. The stock has continued to grind higher, producing a series of green candles along the way. What really caught my attention, however, is what has happened over the last three trading days. We’ve seen multiple strong green candles accompanied by expanding volume. That is exactly the type of price and volume action I like to see when a stock is beginning to establish itself as a leader.

One of my favorite tools for identifying potential opportunities is relative strength. Rather than simply looking at whether a stock is going up or down, I want to know how that stock is performing compared with its peers. In this case, I’ve been comparing TRLV to the MSOS cannabis ETF.

If you look at the ratio line on the chart above on the left, you can see something particularly encouraging, TRLV versus MSOS has broken out to a new high. This is precisely what I was anticipating when I turned bullish on the stock back in July.

To me, this is an important confirmation that TRLV is indeed emerging as one of the leading stocks in the cannabis sector. The price action is strong, volume is expanding, and now the relative strength line is confirming that TRLV is outperforming the broader cannabis group.

The next level I’m watching closely is the previous swing high of $13.28, which was established in June. I’d like to see this rally continue and eventually challenge that level. As we get closer to $13.28, I’ll be watching volume carefully. Ideally, I’d like to see volume continue to expand as the stock approaches and potentially breaks through that resistance.

Of course, nothing moves straight up forever, so a pullback wouldn’t surprise me at all. In fact, if we do get a healthy pullback, I would view that as a potential opportunity to add to my long position, assuming the underlying strength remains intact.

If you’d like to read my original post from last month, you can do so by clicking “Don’t Ignore This Bullish Signal in TRLV.”