PLTR Update: Managing Risk While Staying Positioned for More Downside

A few days ago, I posted about the warning signs PLTR was showing through the lens of relative strength, but in this case it was relative weakness that caught my attention. I highlighted how the trendline break would act as the confirmation for the setup, and that signal has already played out. Even so, I still think there is more room to the downside, as the next significant support level sits around the $150 mark.

To manage risk, I decided to take some profits off the table. I closed about a third of my position on the recent close. This allows me to lock in gains and reduce exposure so that if the trade unexpectedly reverses, my loss on the remaining position will be very small. It’s always important to respect risk and be ready for scenarios that don’t go your way.

I’m still holding two-thirds of my original position because I believe there’s a chance for a larger move down. The setup is still valid, and the technicals suggest that the downside momentum could continue before reaching the next support level.

. This trade is a good example of balancing risk management with conviction, taking profits where appropriate, but staying engaged for the bigger move.

It’s always a careful balance, but having a plan for both partial profits and holding a core position helps me manage risk while staying positioned for meaningful gains.

If you’d like to understand why I got into this trade in the first place, you can read my original PLTR trade analysis from a few days ago.

RDW Soars: How the 6-Day Cycle Helped Spot This Trade

Wow, what a day for RDW! This is a stock I’ve been writing about recently, and the 6-day cycle really helped us time into the trade perfectly. If you missed my early heads-up from a few days ago, today would have been a great example of how relative strength can guide you into a trade. I want to walk through the setup and show why this move unfolded so cleanly.

Above is a 5-minute chart of RDW, with the SPY in the lower pane for comparison. Around 10:20 ET, the SPY made a lower low, but RDW held a much higher low. That divergence was a clear clue that buyers were in control. Another hint was the elevated volume compared to the previous day, the kind of confirmation that signals conviction from the buying side.

Once the stock broke above $8.35, it continued moving higher into the close. Watching this unfold in real time, it was just a wonderful setup: clear price structure, strong relative strength, and supportive volume.

On the right is a daily chart of RDW, and you can see this is the largest green day we’ve seen in a while. The top of the channel comes in around $9.50, so I think there’s more upside potential still left in the stock before we see a pullback.

This trade is a great example of how combining the 6-day cycle with relative strength analysis can give you an edge, letting you spot entries well before a big move occurs. The signals were there, you just had to know what to look for.

For a deeper dive on this trade and how the 6-day cycle helped me get in ahead of this move, click here. It’s always exciting to see a plan come together, and RDW is a textbook example of timing, strength, and conviction lining up perfectly.

TLRY: Watching for a Reversal After Record December Volume

 

Has anyone seen TLRY’s record monthly volume? When I look at the monthly chart on the right above, the first thing that stands out is just how heavy trading was for the month of December. This wasn’t a subtle increase in activity, it was a clear surge in participation. To me, that kind of volume tells a very specific story. There is serious interest in this stock, and more broadly, in the cannabis space as a whole. This isn’t based on hoping or wishing for higher prices. When volume expands to this degree on a monthly timeframe, it’s a fact that larger players are involved. Big money doesn’t show up quietly.

What makes this even more interesting is what price has done alongside that volume. Shifting over to the daily chart on the left, Wednesday marked the eighth consecutive day of a lower daily high, pushing price directly into a significant gap support zone. That’s an area I’ve been watching closely. Persistent lower highs often indicate sustained selling pressure, but when that pressure leads price into well-defined support, my attention shifts toward the possibility of a reversal rather than continuation.

There are also a few contextual factors that add weight to this setup. Seasonality is one of them. Historically, the cannabis stocks tend to perform better during January and February, and that tailwind is now directly in front of us. In addition, there’s the potential for a headline catalyst if we hear from Pam Bondi in the coming weeks. While I never rely on news alone, I do respect the way catalysts can act as accelerants when a stock is already at an inflection point.

Another subtle but important detail is the narrowing of the daily ranges as TLRY approaches this support zone. Volatility is contracting, which often signals a slowing of downside momentum. That kind of behavior frequently shows up ahead of meaningful turns, especially when combined with heavy volume and key support.

All things considered, I’m not making predictions, but I am paying attention. TLRY has enough elements lining up here to make it worth keeping on your radar for a potential long entry. Now it’s just a matter of seeing how price responds from these levels and letting the market confirm or deny the thesis.

For more analysis and market insights, visit my homepage 

DJT: Heavy Volume at Major Monthly Support Has My Attention

 

I’d like to talk about a trade I’m currently stalking, one that has been quietly working its way onto my radar. On the right side of the chart above is a monthly chart of DJT, and the first thing that jumps out at me is that we’ve just tested major monthly support. This is an area that has mattered in the past, and history shows us that on three prior occasions, price rallied sharply after testing this same zone. That alone is enough to make me pay attention.

What really adds weight to this level, however, is volume. December printed the heaviest monthly volume we’ve seen in the past year, and importantly, DJT managed to close the month positive. When I see heavy volume coming in at a long-term support level and price refuses to break down, I start thinking in terms of accumulation rather than distribution. That combination of support and volume is not something I ignore.

Now let’s zoom in to the 60-minute timeframe, where the SPY is plotted in the lower pane for comparison. This is where things get even more interesting. On Wednesday, DJT began to diverge from the SPY, as highlighted at points A and B. While the broader market was weakening, DJT held firm and even pushed higher. To me, this is an early sign of relative strength, suggesting that buyers are stepping in ahead of the market.

From a structural standpoint, DJT has also broken its downtrend line on this timeframe. That’s a meaningful development. If this holds, we may be in the process of forming the first higher low of a new short-term uptrend. When structure starts to improve at the same time relative strength appears, I take notice.

When I put all of this together, heavy volume at major monthly support, improving structure on the 60-minute chart, and early signs of relative strength, we start to see the makings of a potential long setup. For me, I’ll be watching Wednesday’s high at 13.80 as a possible long entry trigger.

This is not a recommendation. It’s simply what I’m watching and how I’m thinking about it. DJT is worth keeping on your radar.

For more analysis and market insights, visit my homepage 

RDW: Record Monthly Volume at Major Support Tells an Important Story

 

One of the most important developments in RDW this past month hasn’t been price alone, but volume. December gave us record monthly volume, and that’s something I don’t ignore especially when it occurs near a well-defined support level.

First, let’s talk about why this volume is showing up.

RDW sits at the crossroads of several powerful narratives: space infrastructure, defense spending, and government-backed contracts. Over the past few weeks, renewed attention around space and defense names has brought speculative capital back into the group. Even incremental contract headlines, analyst commentary, or sector chatter can act as fuel in a stock with RDW’s structure.

Another factor is options activity. We’ve seen increased call buying in RDW, which often forces market makers to hedge by purchasing shares. That process alone can significantly inflate trading volume, especially in a stock with a relatively modest float.

But volume without context doesn’t mean much. What matters is where it’s occurring.

As highlighted on the chart above, RDW has held major support near the $5 area. Despite heavy trading, sellers have been unable to push price decisively below this level. That’s a key tell. When record volume shows up and price stops going down, it suggests absorption rather than distribution. In other words, supply is being met by demand.

This type of action often marks a transition phase from downtrend to basing, or from weak hands to stronger ones. It doesn’t guarantee higher prices, but it does tell me risk is becoming better defined. Support is clear. Participation is rising. Something is changing.

For now, I’m less focused on predicting the next headline and more focused on respecting what price and volume are already telling us. And right now, RDW is sending a message worth paying attention to.

For those who want more context, you can read my earlier analysis on RDW as a potential long entry here.