After Five Weeks of Selling, Uranium Stocks May Have Turned the Corner

 

Today was an impressive day for uranium and nuclear stocks, with the URA ETF soaring 5.45%. After a challenging five-week period of selling pressure, it appears these stocks may have finally found a bottom. The sharp rebound today suggests that sentiment could be shifting, and traders like myself are paying close attention to potential buying opportunities.

One stock that stands out to me is NNE. Looking at the weekly chart, you can clearly see a well defined upward channel. The channel has multiple touches on both the support and resistance lines, which adds credibility to its structure. Patterns like these are particularly useful because they give a visual framework for potential entry and exit points.

Another encouraging sign is the declining volume over the past five weeks. During a pullback, decreasing volume is exactly what you want to see, it indicates that selling pressure is easing and that the decline may not have strong conviction. This sets the stage for a potential resumption of the upward trend.

Going forward, I’ll be closely monitoring the daily volume on NNE. If volume begins to pick up on pullbacks or during moves higher, it could confirm renewed buying interest and provide a favorable environment for entering trades. My plan is to look for pullbacks within this channel as potential buying opportunities, using volume as a key confirmation tool. Overall, while caution is still warranted, the technical setup in NNE and the broader uranium sector is starting to look promising for those ready to capitalize on a potential rebound. Explore more trading ideas at The Relative Strength Trader

CURLF Takes the Lead: Relative Strength Breakout as MSOS Approaches $4

 Looking at the chart on the left which is a daily MSOS chart, the first thing that stands out is how price is finally starting to push through the downtrend line that’s been in place since the October highs. This is the first sign of developing strength we’ve seen in a while, but for the momentum to truly shift back to the upside, MSOS still needs to close above that key $4 level. A breakout through that area would confirm that buyers are finally stepping back in and that this downtrend may be coming to an end.

On the right side of the screen is a daily chart of CURLF, and there are two important takeaways here. First, CURLF has closed above its own downtrend line which puts CURLF in a stronger technical position. But what really grabs my attention is the lower pane, where I plot a relative strength line of CURLF versus MSOS. That RS line has already broken out to a new high. If you’ve followed my work, you know how important relative strength is in my trading approach. I've written about this concept many times but for further review you can check out this post: Using Relative Strength in Trading: A Key Tool for Market Outperformance

The fact that CURLF is showing relative strength before the broader cannabis ETF turns up tells me one thing: CURLF is starting to take on a leadership role. If MSOS can get moving, I expect CURLF to be one of the names leading the way. Stay tuned.

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.