Watching KWEB: Ratio Line Signals Weakness Ahead of Price

 

Above is a daily chart of KWEB, the China ETF, and in the lower pane, I’ve plotted the ratio line of KWEB versus SPY. This ratio line is one of my favorite tools for spotting relative strength or weakness in a stock or ETF compared to the broader market. At point A, you can see the ratio line broke down to a new low before the price did. That was a warning signal, when the relative strength line turns weaker ahead of price it often foreshadows a decline once support gives way, and that’s exactly what played out.

Fast forward to now, at point B, we’re seeing the same pattern repeat. The ratio line is again breaking down before KWEB’s price, signaling that KWEB is underperforming the broader market. This kind of relative weakness is important to track because it helps you anticipate potential price declines before they happen.

That said, just because the ratio line breaks lower ahead of price doesn’t mean you immediately jump into a short position. Confirmation is key, I typically wait for a price-level break of support to validate the signal. Watching how price reacts around key support areas gives me more confidence that the move has momentum behind it.

For now, I’m keeping KWEB on my radar as a potential short. The combination of relative weakness and approaching support levels makes this setup worth watching closely. I’ll be looking for a break of that support as my trigger point, while the ratio line continues to guide me on whether KWEB is truly underperforming the market.

QBTS Pullback Finds Support, Trendline Break Confirms Upside

 

Above is a daily chart of QBTS, and it’s been interesting to watch over the past several weeks. The stock has experienced a significant pullback over the last six weeks, but what caught my attention is that it has held a key support area. The $20 level has historically been significant resistance for QBTS, from May through September, and it’s now flipped into support. That kind of role reversal is exactly what I look for when assessing potential long setups.

Last week, we tested this support area, and the stock responded well, bouncing off the $20 level. That showed to me that buyers are stepping in at a level that previously caused selling pressure, which is an encouraging sign for those of us following the trend. Today, QBTS broke the downtrend line drawn from the October high, and although the volume increase was modest, it’s still a positive confirmation. Breaking a downtrend line is often the first step in a potential reversal, and combined with support holding, it increases my confidence in higher prices.

Looking forward, I expect QBTS to continue moving higher in the coming weeks as buyers take control. I’ll be watching for follow through on volume to confirm the breakout, but for now, the technical setup is aligning in favor of the bulls. This is a good example of how key support levels, trendline breaks, and historical resistance can guide trading decisions.

TLRY Hits a Key Spot: Weak Trend but Possible Reversal Ahead

 

Above is a daily chart of TLRY, and as you can see, it remains one of the weaker cannabis stocks in the group. Even so, I think TLRY is sitting at a critical level right now. We’ve come all the way back down to the gap from August, the same gap that ignited a strong eight week rally. When a stock returns to a gap that previously launched a powerful move, I always pay close attention. Sometimes these gaps act like hidden support zones that most traders forget about.

At the moment, I have no position in TLRY. The trend is still clearly down, and I’m not in the habit of stepping in front of weakness just for the sake of “catching a bottom.” But if this gap level happens to hold and we see the right kind of candle, something decisive, like a bullish engulfing bar or a large bottoming tail, I might consider nibbling at a new long position. Volume would be especially important here. A meaningful reversal off this level needs heavy buying interest behind it, not just a weak bounce on light volume.

Ideally, before I commit to anything, I’d like to see the trendline I’ve drawn on the chart get taken out. That would tell me the sellers are finally losing control. For now, I’m simply on alert. TLRY is at a key level with the potential for a reversal signal, but I need to see the market confirm it. Until then, I’m watching closely and letting price action guide my next move.

KITT’s Igniting Bar: Why Today’s Move Could Be the Start of Something

 

Above is a 15-minute chart of KITT with the after-hours session shaded in grey, and what really stands out to me is just how strong this stock traded today. KITT has been on an absolute tear, and even as the regular session closed, the momentum didn’t fade. Instead, the stock continued to push a bit higher after-hours, showing that buyers are still very much in control. Whenever I see a move like this, steady intraday strength that extends into the after-hours, it tells me there’s real interest behind the move, not just a one-off spike.

Now, when I shift my attention to the daily chart on the right, the picture becomes even more compelling. Today’s volume completely dwarfs the previous sessions. In my experience, when you see a daily candle with that kind of range supported by such heavy volume, it often signals an igniting bar, one of those days that kicks off a bigger trend. That doesn’t guarantee anything, but it does tell me that something meaningful may have changed in the stock’s character.

That said, I’m not the type who likes to chase a stock after a major surge. I’d much rather see KITT digest this move. Ideally, I’d prefer a lengthy consolidation or even a pullback, something like a retracement of a third of today’s rally before considering an entry. Healthy pauses often reset the chart, shake out weak hands, and build the base needed for the next leg higher. Patience here could make all the difference.

ANIX: A Surprise Surge That Caught Traders Off Guard

 

Today ANIX was up more than 15% on heavy volume, and the price action really stood out to me. What I liked most about today’s move was how it completely caught traders off guard. Yesterday we saw a weak close, with the stock finishing right on its low. Under normal circumstances, that kind of finish discourages longs and gives shorts confidence heading into the next session. Instead, ANIX opened with a gap higher this morning, creating a classic trap for anyone leaning the wrong way. That sudden shift forces weak shorts to cover, which adds fuel to the upside momentum.

When I step back and look at the weekly chart shown on the right side of my screen, I notice something even more important. We’re now pushing toward the early October high, a level that traded with extremely heavy volume. Whenever a stock approaches a major volume node like that, especially after a strong move on big daily volume, it tells me that large money may be stepping back in. That’s the type of activity I always want to pay attention to.

My approach is simple: I try to follow the money. I’m not trying to predict anything or outsmart the market. Instead, I look for signs of accumulation, traps, and confirming volume. Today’s action in ANIX checks all those boxes. If the stock can build on today’s strength, I’ll be watching closely for a clean breakout over the $5 level in the days ahead. That’s the spot where momentum traders may really start to press their positions.