TLRY and Cannabis Stocks: Watching for a Post Holiday Turn Higher

 

The day after Christmas is usually a low volume session, but over the years, I’ve noticed that some of the most significant moves can happen on these quieter days. I think the lack of volume sometimes amplifies the swings, which is exactly why I want to be ready for Friday’s session.

Looking at the daily chart of TLRY, we are holding support nicely, and we just put in an inside day on very low volume. This is particularly interesting because it comes after four consecutive lower highs on the daily chart. The high of the mother candle sits at $10.95, and I’ll be watching closely to see if TLRY can break back over $11 for a potential long entry. I like this setup because it combines several factors that often precede a move higher: consecutive lower highs, an inside day, support holding, and lower volume on the pullback. It’s a confluence that tends to attract buyers once the right trigger occurs.

TLRY isn’t the only stock showing this kind of pattern. Many other cannabis names, like MSOS, GTBIF, TSNDF, and CRON, are displaying similar setups. When I see multiple stocks in the same sector lining up in this way, it gives me more confidence that we could be on the verge of a broader move higher.

For me, this is a reminder to pay attention to these setups and have a plan ready. I’ll be watching for entries above key levels, keeping an eye on volume, and monitoring support closely. The combination of a low volume post holiday day and a potentially bullish technical setup makes this a session where I want to be alert and ready to act. All of these cannabis stocks are on my radar right now, and I believe we may be in the early stages of a turn higher.

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Waiting for Confirmation: How NVDA Avoided a False Breakdown

 

Above is a daily chart of NVDA, and in the lower pane I have a ratio line of NVDA versus SPY. This setup offers a great lesson on why waiting for confirmation is just as important as identifying a potential setup. Spotting relative weakness is one thing, but acting on it too early can quickly turn a good idea into a bad trade.

About six days ago, I posted about the relative weakness I was seeing in NVDA. The ratio line was making a new low ahead of price, which is often an early clue that a stock may continue to trend lower. This kind of divergence gets my attention because it can act as a leading indicator, showing weakness that isn’t always obvious on the price chart. At the time, the setup made sense, and a bearish outcome seemed possible.

However, I was very clear with myself about one thing: I was not going to act without confirmation. For me, that confirmation was a break of key support at 169.55. That level had been defended a couple of weeks earlier and until it gave way, any short position would have been based on anticipation rather than evidence. Anticipation can be expensive in this business.

As you can see now, NVDA never broke that support level. Instead of rolling over, price held above 169.55 and has started to show a bit of strength. The relative weakness I initially observed did not follow through, and the market resolved the situation by moving higher instead. Because I waited for price to confirm the idea, I stayed on the sidelines and avoided what would have turned into a losing trade.

This is a perfect example of how discipline pays. The ratio line gave me an early warning, but price had the final say. By waiting for confirmation, in this case a clean break of support that never happened, I protected my capital and my mindset. Not losing money is often just as important as making it, and patience is what made the difference here.

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Relative Strength vs MSOS: How YCBD Signaled a Move Before the Cannabis Sector

 

Today was a great real time example of relative strength versus MSOS, and it reinforced an important lesson I’ve learned over the years. It’s not enough to only compare your stock to the S&P 500. That’s useful, but it’s incomplete. You also need to know how your stock is behaving relative to its industry group. In this case, that benchmark is MSOS, the cannabis ETF.

If you look at the 5-minute chart of YCBD above, with MSOS plotted in the lower pane for comparison, something immediately stood out to me. Around 1:00 ET, MSOS was making new lows and was clearly in a downtrend. The entire cannabis space was under pressure. Yet YCBD refused to follow it lower. Instead of making a new low with the group, YCBD put in a higher low. That divergence is not random, and it’s exactly the kind of information I look for when I’m hunting for opportunity.

When an entire sector is being sold, as clearly shown by MSOS, and one stock simply stops going down, that tells me sellers are running out of ammunition in that name. Buyers may not be aggressive yet, but they’re quietly absorbing supply. I even pointed this out on social media in real time, saying I was watching YCBD for a break of the high of day.

Once that high of day was taken out, YCBD responded exactly how a strong stock should. It gave us a clean pop and closed near the highs of the session. The real confirmation came after the closing bell. While every other cannabis stock went quiet, YCBD kept pushing higher, eventually tagging 1.93 in the after-hours session. It’s no coincidence that it was the only cannabis stock moving after the close.

Relative strength, especially relative strength against the ETF representing your industry group is what tipped me off to this move. On the daily chart, we now have our first green day after a three day selloff. That’s a small but important change in character. From here, I’ll be watching closely for continuation to the upside in the days ahead, letting relative strength continue to guide my decision-making.

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Three Lower Highs at Gap Support: Waiting for MSOS to Reclaim $5

 

Above is a daily chart of MSOS, and as you can see, price is now well into the gap. After a sharp selloff, it was encouraging to see a green candle print today, helped along by a news story that hit the tape just before 3:00 ET. While the headline provided a spark, what really has my attention is the structure that’s forming on the chart, not the news itself.

MSOS has now put in three consecutive lower highs following that significant selloff, and all of this is happening right into gap support. This is the kind of price action I like to see. Instead of panic selling or wild volatility, the pullbacks have been relatively clean and controlled. In my experience, these orderly lower highs into a defined support area often set the stage for a meaningful reversal. I’m not interested in guessing bottoms, but I do pay attention when price starts to behave in a familiar and constructive way.

We’ve seen this movie before. A great example was back on November 20th, when a similar pattern of lower highs helped me nail the bottom. That setup didn’t feel comfortable at the time either, but the chart told a clear story for those willing to be patient and disciplined. It’s that prior context that makes this current action stand out to me.

That said, I’m not jumping the gun here. For me, confirmation matters. I’m not just looking for a break of today’s high; I want to see the $5 level reclaimed. Today’s high came in at $4.87, and yesterday’s high was $5.01. A decisive move back above $5.01 would tell me buyers are truly back in control. That’s where I’ll look to add to my long position, which I’ve been holding since the summer lows, and let the chart do the rest of the talking.

QBTS Shows Clear Relative Strength as Trend Turns Back Up

 

Today was a big day for QBTS, and the charts did a great job of telling the story. On the left, we have the daily chart, and the first thing that stands out to me is how well price respected support last month. That level was tested, buyers stepped in, and the stock held. That alone gets my attention, but what followed is even more important. We’re now seeing a clear higher low and a higher high, which tells me the intermediate trend has turned back up. When structure shifts like that, I want to be paying close attention.

Another key piece of evidence is volume. Today’s move came with a noticeable expansion in volume, which adds validity to the breakout we saw. Breakouts that occur on light volume are easy to fade, but when volume confirms the move, it suggests real participation and commitment from buyers rather than just a short-term pop.

If we shift to the 5-minute chart on the right, the relative strength in QBTS was obvious almost immediately. Right from the open, QBTS pushed higher while the SPY moved sideways. That early divergence was the first clue that this stock had its own agenda. Volume was elevated right at the open as well, reinforcing the idea that there was strong demand from the start of the session.

The relative strength became even more apparent around 10:30. When the SPY made a new low, QBTS did not follow. Instead, it put in a much higher low, which is exactly what I want to see when I’m evaluating leadership. Stocks that refuse to go down when the market is weak are often the ones that lead when the market turns.

Once QBTS broke above its intraday highs, it continued to grind higher and ultimately closed at its high. That kind of price action speaks to sustained buying interest. This is definitely a stock I’ll be keeping on my radar in the days to come.