Relative Weakness Keeps Cannabis Stocks in Limbo

 

Another frustrating day for cannabis traders who are leaning bullish. From the open, relative weakness was on display, and it never really let up. This wasn’t a sudden breakdown or a surprise move late in the session, it was a slow, persistent bleed that played out all day long.

Above, I’m looking at a 5-minute chart of MSOS, with the SPY below it for comparison. The key moment for me was at point B. While the SPY pushed to a new high, MSOS couldn’t follow. That’s textbook relative weakness. When the broader market is making higher highs and your group can’t even keep pace, that’s a warning sign. It tells you buyers aren’t as motivated, and sellers are more than happy to use strength as an opportunity to unload.

Once short-term support gave way, the selling accelerated and carried pretty much into the close. There was no meaningful bounce attempt, just steady pressure. Days like this are tough psychologically because nothing dramatic happens,  the stock just quietly does the wrong thing all session long.

Shifting to the daily chart on the right, today’s candle tells a slightly different story. The range was relatively small, and price remains trapped in a tight four week consolidation. Despite all the intraday frustration, we’re still chopping sideways. That’s important context. This market isn’t breaking down, but it’s also not breaking out. It’s waiting.

And we all know what it’s waiting for: clarity on cannabis rescheduling. With just four trading days left until the end of January, that update could drop at any time. That uncertainty explains the compression we’re seeing. Traders are hesitant to commit aggressively in either direction without a headline.

I can’t help but think back to August, when we were told “just a few more weeks.” Those few weeks quietly turned into four more months. Yes, we eventually got the executive order signing, but the waiting was brutal. I really don’t want to see four more days turn into something longer again.

For now, patience is the only real edge. Until relative strength shows up and price escapes this range, frustration is simply part of the trade.

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Watching 10.30 as Potential Support in RDW

 

Now that RDW is starting to pull back, I just wanted to give a quick update on how I’m looking at this name. Up to this point, the pullbacks have been fairly orderly, and one of the tools that has been helping me time entries is the 13-day simple moving average of the lows. This moving average has done a good job of acting as dynamic support, and so far it’s been working well for me.

As of now, that 13-day SMA of the lows is sitting right around the 10.30 level. That immediately puts that area on my radar as a potential support zone. That said, I’m not interested in blindly buying just because price touches a moving average. A level on a chart is only an area of interest it’s not a signal by itself.

If RDW pulls back into that 10.30 area, what I want to see next is confirmation that buyers are actually showing up. There are a few different ways that can happen. One thing I’ll be watching for is a bullish reversal bar on an intraday timeframe. That would tell me sellers are losing control and buyers are beginning to step in.

Another clue could come from relative strength. If the broader market is weak and RDW is holding firm or starting to firm up near that support level, that’s information. Relative strength during a pullback often precedes the next leg higher.

I’ll also be paying close attention to how the stock behaves early in the session if it’s sitting near support. A tight consolidation during the first hour, followed by an opening range breakout, would be another constructive signal. Tight price action after a pullback often means supply is drying up.

The main point is this: 10.30 is an area, not a trade. I’m watching that level closely, but I’ll only get involved if price action confirms that buyers are defending it. When support lines up with constructive behavior, the odds improve. Until then, patience is part of the process.

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Uranium Stocks Reverse Hard at Resistance

 

It was a big reversal day for the uranium stocks, and the warning signs showed up almost immediately. Right from the open, this group displayed clear relative weakness and that weakness persisted all the way into the close. When a sector can’t find its footing early in the session and continues to sell off throughout the day, I take notice especially when it’s occurring at an obvious technical level.

If you look at the daily chart of URA above, you’ll see price pushed right up into a well defined resistance zone and then failed. That area had already proven to be problematic in the past, and once again sellers showed up right on cue. The result was a very bearish candlestick. We didn’t just print a bearish engulfing candle, we engulfed the previous two days of trading entirely. That’s a strong reversal signal and not something I’m willing to ignore.

Reversal candlestick patterns on their own can sometimes be noise, but when they occur at resistance, they carry a lot more weight. Context matters. This wasn’t a reversal in the middle of nowhere. It happened exactly where you would expect sellers to defend price, which increases the odds that this move is meaningful rather than random.

Another important technical development was the break of the uptrend line that had been in place since the beginning of the year. Trend lines aren’t magical, but they do reflect behavior. When an uptrend that’s been respected for weeks finally gives way, it often signals a change in character. That’s what we saw today.

Volume was also respectable on the selloff, which tells me this wasn’t just a lack of buyers, it was active distribution. When downside pressure shows up with expanding volume near resistance, that’s a combination I take seriously.

Putting it all together, resistance rejection, a strong bearish engulfing pattern, a broken uptrend line, and solid volume. I expect lower prices ahead for uranium stocks in the coming days. 

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CURLF Holds Key Weekly Support as Relative Strength Turns Up

 

Above is a weekly chart of CURLF, and the first thing I want to point out is that price appears to be holding moving average support. This isn’t some random moving average that I pulled out of a hat. It’s one I’ve been using for a long time because it has done a remarkably good job of defining both support and resistance over the past two years. Specifically, this is the 15-week simple moving average of the lows, and it continues to earn its keep.

If you study the chart closely, you’ll notice how often price has reacted to this average almost to the penny. When CURLF is above it, pullbacks into the average tend to attract buyers. When price is below it, rallies often stall right at that same level. That kind of consistency is significant to me because it tells me the market is paying attention to it, and when the market pays attention, I want to be paying attention too.

Last week was another good example. CURLF pulled back and tagged this 15-week moving average, but instead of breaking down, it held. We closed the week in positive territory and left behind a small bottoming tail. That tail tells me buyers stepped in at support and defended it. In a weak stock, that level would have given way. Here, it didn’t.

In the lower pane, you can see the relative strength line of CURLF versus MSOS. After a period of drifting lower, that ratio line now appears to be turning back up. Relative strength turning higher while price holds support is something I always want to see, as it suggests CURLF may be starting to outperform the broader cannabis space again.

I’ve been long CURLF for many months and have been content to sit through the consolidation. At this point, I’m not looking to add blindly. My plan is to let price confirm. On the daily chart, a move above 2.82 would take out the most recent pivot high and confirm a small double bottom that held support near 2.40. If price can clear that level, I’ll look to add to my position.

For now, the combination of moving average support and improving relative strength keeps CURLF firmly on my radar.

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Six Weeks of Compression: Is Cannabis Setting Up for a Move?

 

It was another quiet week for cannabis stocks, but despite the lack of excitement, the group managed to do something constructive. We closed the week on the highs and finished in positive territory. That may not sound like much, but in a market like this, small details matter, especially when they keep repeating.

If you look at the weekly chart above of MSOS, you’ll notice something interesting. This marks the sixth consecutive week where price has closed in a very tight range between roughly 4.75 and 4.90. As I mentioned last week, this kind of action is a clear sign of compression. Volatility has dried up, price has gone quiet, and the market is coiling. From my experience, these periods don’t last forever. When they resolve, they tend to resolve with a directional move.

The longer price moves sideways, the more meaningful the eventual breakout tends to be. Right now, MSOS is doing exactly that, moving sideways frustrating both bulls and bears, and lulling most participants to sleep. That’s usually when conditions are being set for something larger.

Timing is also worth paying attention to. We now have just five trading days left until the end of January. With Pam Bondi expected to finalize cannabis rescheduling, that headline could drop at any time. In my opinion, that’s the potential spark the market has been waiting for. When expectations are low and positioning is light, it doesn’t take much to shift sentiment quickly.

While the broader group has been quiet, a few individual cannabis stocks tested support this past week and appear to be bouncing. That tells me sellers may be running out of urgency at these levels. I’m not seeing aggressive downside follow-through, and that’s another subtle but important clue.

For now, patience remains the name of the game. Compression, quiet price action, and low volatility often precede expansion. The question is whether this is the calm before the storm and if this is the week volatility finally expands. I’m positioned for that possibility and prepared for movement when it comes.

Are you?

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