Holding TLRY Despite the Warnings… Here’s What I Learned

 

As we begin a new month, I can’t help but reflect on some of the trading mistakes I made recently, specifically with TLRY. One of the main tools I use in my trading and investing is relative strength, which is why I’m a little annoyed with myself that I’m still holding most of my shares. I know better than to ignore it, yet here I am.

Above is a daily chart of TLRY, and in the lower pane, I’ve plotted a relative strength line of TLRY versus MSOS. Looking back, there are clear moments where TLRY signaled caution. At point B, TLRY made a lower high compared to point A. If you compare that to a chart of MSOS not shown here, you’d see it made a much higher high. I remember that day vividly. While my P&L for MSOS was setting new highs, my TLRY profit was far below where it had been in October, at point A. That is textbook relative weakness, yet I held on.

Then came the large bearish outside reversal day tied to the executive order signing, followed by follow-through the next day. These were clear warning signals, yet I still held. And even toward the end of January, when TLRY broke down out of its consolidation and filled the gap, I continued holding. I kept asking myself, how many more bearish signals do I need to see before I act on them?

By ignoring these relative weakness signals, I now find myself holding TLRY while its ratio line is teetering on the edge of new lows. I'm still up on the trade, but it’s rapidly becoming one of my worst-performing holdings. The lesson is painfully clear: I should have at least lightened up on my position when the early warnings appeared, with the mindset that I could always get back in if the trend reversed.

This experience is a perfect reminder of an old saying I often quote: “Trade what you see, not what you think.” TLRY embodies exactly why that rule exists. It’s easy to get attached to a position when you’re up on paper or when you believe in the long-term story, but the market doesn’t care about your thesis. It only reacts to price and relative strength.

Reflecting on this trade, I can see clearly where I went wrong, and I’m committed to letting the signals drive my decisions moving forward. TLRY may still have upside, but right now it is a stark example of what happens when you ignore what the charts are telling you. Going forward, I will act more decisively on relative weakness, even if it means taking partial losses. TLRY has taught me an invaluable lesson about patience, discipline, and respecting the market over my own bias.

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Bitcoin Is Weak — RIOT Doesn’t Care

 

If you’ve read my most recent post on Bitcoin, you know I’ve been bearish for quite some time, and that hasn’t changed. Longer-term cycles still suggest lower prices ahead. That said, markets don’t move in straight lines, and based on a shorter-term cycle, there is reason to believe we could see a short-term bounce develop. I have no interest in buying Bitcoin itself, but there is a Bitcoin-related stock that’s starting to get my attention and that stock is RIOT.

Above is a daily chart of RIOT, and in the lower pane I have GBTC for comparison. I like using GBTC as a proxy for Bitcoin because it removes some of the noise and lets me focus on relative performance. Right away, one thing stands out. At point B, GBTC is making new lows relative to point A. Bitcoin, at least through this lens is clearly weaker. RIOT, on the other hand, is telling a very different story.

While GBTC pushed to fresh lows, RIOT held well above its prior low and actually formed a much higher low. That’s classic relative strength. It tells me that despite continued weakness in Bitcoin, buyers are stepping into RIOT earlier and with more conviction. When you see a stock refuse to make new lows while its underlying asset is still sliding, that’s worth paying attention to.

Now, seeing relative strength does not mean I’m rushing out to buy this at the open. Nothing could be further from the truth. Relative strength simply puts a stock on my radar. From there, I let price action do the talking. For me to get involved on the long side, I would need to see clear resistance levels taken out or strong intraday relative strength develop over the coming week. I want confirmation that buyers are willing to press their advantage, not just defend support.

If RIOT fails to do that, I’ll happily do nothing. That’s an outcome I’m perfectly comfortable with. I don’t feel the need to force trades, especially when my broader view on Bitcoin remains bearish. At this point, RIOT is simply a watchlist stock, nothing more.

However, if Bitcoin does manage to rally over the short term, RIOT has positioned itself as a potential leader. That’s the type of stock I want to be focused on, one that shows strength before the move, not after it’s already underway. For now, it’s a waiting game. Let’s see what unfolds in the coming days.

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This LUNR Setup Has Worked Before… Here We Are Again

 

Above is a 60-minute chart of LUNR, and in the lower pane I have a 14-bar stochastics indicator. I’ll be the first to admit I’m not a big fan of oscillators in general. Most of the time they create more noise than clarity. That said, when an oscillator is clearly synced with the dominant cycle of a stock, the signals tend to be far more reliable. In this case, LUNR’s stochastics has done a pretty good job of identifying meaningful short-term lows.

If you look back on this chart, there have been four separate occasions where the stochastics pushed below the buy line and then turned back up. Each time, that turn coincided with a significant bottom and led to a solid rally. Those weren’t minor bounces either, they were tradable moves. That’s why I’m paying attention now, because once again the oscillator is sitting down in the buy zone.

What really adds weight to this setup for me is the price action itself. LUNR is currently sitting at the lower end of a clearly defined price channel, which appears to be providing support around the $18.50 level. I like when multiple tools point to the same area. The channel alone gives me a level to work with, but when you combine that with an oscillator that has historically marked good entry points, the odds start to tilt in your favor.

That said, I’m not interested in blindly buying just because we’re at support and the oscillator is oversold. The way I plan to approach this is simple: I want to see $18.50 hold, followed by the stochastics crossing back above the buy-zone level. That turn is my signal that momentum may be shifting back to the upside.

One very important caveat here is relative strength. I do not want to see relative weakness at these levels. If the broader market is moving higher and LUNR can’t participate or worse if it breaks cleanly below $18.50, then all bets are off. In that scenario, I’m not interested in buying. Support failing while the market is strong is a big red flag.

For now, this is a stock on my watchlist, not in my portfolio. If the pieces line up, it could offer another solid opportunity. If they don’t, I’m perfectly fine standing aside.

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A Low Is Due… But I’m Still Not Buying Bitcoin

 

I’ve been bearish on Bitcoin for the past several months, and I think the evidence continues to support that stance. When I look at this market through the lens of relative strength, it’s clear to me that money has been steadily leaving Bitcoin rather than flowing into it. That kind of behavior usually isn’t a recipe for sustained upside. On top of that, my longer-term cycle work still points to lower prices ahead, potentially stretching into the late summer months. From a bigger picture perspective, I remain firmly in the bearish camp.

That said, markets don’t move in straight lines, and the short-term picture is a bit more nuanced. Over the past 15 months, Bitcoin has been respecting a very consistent 2½-month cycle. This cycle has done a remarkably good job of identifying time windows when short-term lows are likely to form. If you look at the daily chart above, you can see how often this rhythm has shown up and how useful it’s been in highlighting potential turning points.

Based on that cycle, another short-term low looks like it could be due sometime this coming week. Now, even though that suggests a bounce may be approaching, it doesn’t change my overall bias. I’m not interested in trying to pick a bottom here. Instead, I’d much rather let Bitcoin bounce and then look for that rally to create another, potentially lower-risk shorting opportunity.

For me, the key question is whether this 2½-month cycle continues to dominate the short-term swings in this market. If it does, we should get a decent tradable bounce soon. Either way, I’ll be watching closely to see how things unfold and whether this familiar rhythm once again shows its hand.

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YCBD Woke Up on Friday

 On Friday there was one cannabis stock that really caught my attention, and that stock was YCBD. It wasn’t just the price action that stood out, but the combination of volume and range that showed up at exactly the right time. Above is a daily chart of YCBD, and the first thing I want to point out is the clear expansion in both range and volume. After contracting for most of the week, the stock finally made its move on Friday, and it did so in a meaningful way.

I always pay close attention to periods of contraction followed by expansion. When a stock tightens up and volatility dries up, it’s often storing energy. In YCBD’s case, that energy was released on Friday. The wide-range candle accompanied by a noticeable increase in volume tells me participation picked up in a big way. That’s not random. That’s buyers stepping in with intent after a week of indecision.

Now shift your focus to the weekly chart on the right, because this is where the bigger picture starts to come together. Notice how the move from point C to point D closely mirrors the move we saw earlier from point A to point B. In both instances, the stock experienced several red candles in a row, pressuring price lower and shaking out weak hands. That was followed by a strong green candle on increased volume at points B and D. Those candles marked the low and signaled the start of the next rally.

Patterns like this don’t guarantee anything, but when I see symmetry like that on a higher timeframe, I take notice. Markets have a way of repeating behaviors, especially in beaten down sectors like cannabis. The fact that YCBD is showing a familiar rhythm on the weekly chart while simultaneously flashing expansion signals on the daily chart makes this setup particularly interesting.

Going forward, there’s one level I’m watching very closely: Friday’s high at 1.32. That level now represents short-term resistance and a potential trigger point. If YCBD can break above 1.32, I think it opens the door for the next leg higher. A breakout through that level would confirm that Friday’s move wasn’t just a one day wonder, but the beginning of a broader rally.

For now, this stock is firmly on my watchlist. I want to see how it behaves around that 1.32 level and whether volume continues to support the move. If it does, YCBD could be setting up for something much bigger.

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