TSLA Back at Key 20-Week Support With an Inside Week

Above is a weekly chart of TSLA with its 20-week simple moving average plotted. This is one of the first things I look at when I’m trying to determine whether a stock is in a healthy intermediate-term trend, and TSLA has respected this level extremely well. Since last summer, this moving average has acted as reliable support on multiple occasions. In fact, it’s been tested six separate times, and each time price found support and moved higher. That kind of repeated behavior tells me this is a level institutions are clearly watching.

Right now, TSLA is once again testing that same 20-week moving average. What makes the current setup particularly interesting is that we’ve just printed an inside week. When I see an inside week form directly on a key moving average, it immediately gets my attention. Inside weeks often represent consolidation and indecision, and when they occur at an important support level, they can act as a springboard for the next directional move.

This is not a spot where I want to anticipate or guess. I want price to confirm. For me, a long entry would require a move above the high of the “mother candle,” which is 457.55. A break above that level would tell me buyers are regaining control and that the 20-week moving average has once again done its job. Until that happens, patience is required.

As I write this on Monday night, TSLA is trading lower along with the broader market, around the 431 area. That doesn’t bother me in and of itself. What matters is whether this moving average continues to hold on a closing basis and whether we start to see price curl back up. If that happens, this consolidation could resolve to the upside, just like it has several times over the past year.

I’m not married to any outcome here. If support fails, I’ll step aside. But if the 20-week moving average holds and TSLA starts pushing higher, this is a setup I’ll be watching very closely for a potential long entry.

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VFF Pullback Looks Like a Normal Pause in a Strong Uptrend

 Above is a weekly chart of VFF, and in the lower pane you’ll see a ratio line of VFF versus MSOS. When I’m analyzing pullbacks, I always like to study the character of prior pullbacks within the same trend. Markets tend to repeat behaviors, and understanding that rhythm can help frame expectations for when a pullback may be nearing its end.

Since the April 2025 low, where VFF clearly bottomed, we’ve seen three meaningful pullbacks. One of them was very short-lived, lasting only a single week. The other two however lasted exactly four weeks before the stock resumed its uptrend. That’s important, because that is precisely what we are seeing now. VFF made a high and then sold off for four consecutive weeks, mirroring the structure of those prior corrections almost perfectly. In strong trends, pullbacks often come in measured, controlled waves rather than sharp, chaotic selloffs.

What I really like about this current pullback is how clean it looks. The stock has been forming consecutive lower highs, which tells me this is orderly profit-taking rather than aggressive distribution. There’s no panic here, just digestion of the prior move. This is typically what you want to see if a stock is going to push higher again.

Looking at the ratio line in the lower pane adds another layer of confidence. VFF has been in a clear uptrend relative to MSOS since October of 2024. That tells me VFF has been outperforming the broader cannabis space for several months now. Relative strength like that usually doesn’t disappear overnight, especially when price action remains constructive.

From a seasonal perspective, cannabis stocks also tend to perform well during January and February, so we still have that tailwind in play. On top of that, Pam Bondi finalizing rescheduling remains a potential catalyst that could inject fresh momentum into the group.

I’ve been long VFF since last summer and I’m not looking to sell into this pullback. Instead, my plan is to add above last week’s high at 3.65, which would signal a potential resumption of the uptrend. That’s how I’m viewing this setup. What do you guys think?

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Mortgage REITs Are Finally Showing Signs of a Trend Change

 

You don’t hear much talk about mortgage REITs these days, and for good reason, they’ve been dead money for a long time. But that’s exactly why I’m starting to pay attention now. When an area of the market has been ignored for years and then begins to show signs of life, I want to know about it. Above is a weekly chart of REM, and in the lower pane is a ratio line of REM versus SPY. That ratio line tells the real story.

For many years, REM has been in a clear downtrend relative to the S&P 500. Owning mortgage REITs simply didn’t make sense when compared to owning the broader market. Capital consistently flowed elsewhere. But look at what’s happening now. For the first time in roughly five years, the REM/SPY ratio is breaking its downtrend line. That’s a big deal. Relative strength trends don’t change often, and when they do, it usually signals an important shift under the surface.

What makes this even more interesting is that price is now confirming what the ratio line has been hinting at. If you look at the price chart of REM, you’ll see it is just now breaking through a key resistance level. I always want to see price confirm relative strength, and that’s exactly what we’re getting here. This combination of relative strength improving and price breaking out is often how new leadership begins.

When I drill down into the individual names, the picture gets even better. Stocks like NLY, TWO, and AGNC have all been acting very well since January 1st. They’ve been making higher lows, holding gains, and responding positively to buying pressure. That tells me money is clearly moving into this space. Institutions don’t tiptoe in quietly by accident.

I’m not chasing these stocks here after the initial move. My plan is simple: I want to be a buyer on a pullback. If this really is a change in trend, there should be opportunities to enter on weakness. Mortgage REITs may not be exciting, but the chart is starting to say something important and I’m listening.

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RDW Bulls in Control as Volume Hits Record Levels

 

Another positive week is in the books for RDW, and once again the bulls remain firmly in control. From both a price and volume perspective, it’s hard not to respect what this market is doing right now. When I look at the weekly chart above, the first thing that jumps out is the record weekly and monthly volume. That kind of participation doesn’t show up by accident. It tells me there is real interest building under the surface, and that often lays the groundwork for further upside down the road.

What makes this setup even more compelling is the steady increase in volume over the past seven weeks. Each push higher has been met with more participation, not less. To me, that’s a sign of accumulation rather than exhaustion.

That said, patience is still my biggest challenge right now. I’ve been waiting for a meaningful pullback to get involved, but my bids were simply too low. That’s frustrating, no doubt, but it’s also part of the process. I refuse to chase price just because I’m afraid of missing out. Chasing might work once or twice, but over time it’s a great way to destroy discipline and risk management.

Ideally, I’d like to see a pullback toward the $9 level, where risk and reward would line up much better for me. Whether we actually get that remains to be seen. Over the past seven weeks, RDW has only given us three pullbacks on the daily chart, and each of them lasted just two or three days before buyers stepped back in. That tells me demand is strong and dip buyers are aggressive.

At the very least, I’m looking for a multi-day pullback to help relieve some of this short-term extension and give me a cleaner entry to work with. Until then, my job is to wait, stay disciplined, and let the market come to me. We’ll see how things unfold next week.

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MSOS Coils as January Catalyst Window Narrows

 Another week is officially in the books, and overall it was a relatively quiet one. Sometimes those are the weeks that test patience the most. When I step back and look at the bigger picture, though, I’m reminded why it’s important to stay focused on structure and context rather than day to day noise.

If you look at the 60-minute chart of MSOS on the left, it’s pretty clear that price has been moving within a defined rising channel for the past three weeks. Right now, we’re sitting near the bottom of that channel. From a technical standpoint, that’s an area where I want to be paying close attention, not because I’m predicting an immediate move, but because risk and reward are starting to line up more favorably if we do see a turn higher.

Overlay that technical setup with the potential fundamental catalyst, and things get interesting. President Trump has publicly stated that he wants Pam Bondi to finalize rescheduling by the end of January. When you actually count it out, that leaves us with just nine more trading days left in the month. That’s not a lot of time. Whether it happens or not, the key takeaway for me is that this catalyst could drop at any point, and the market rarely gives you much warning when that happens.

Looking at the weekly chart on the right, another detail stands out. This was the fifth consecutive weekly close, all within about fifteen cents of each other. That kind of tight clustering usually doesn’t last forever. As I mentioned last week, I’ve been expecting an increase in range expansion. We didn’t get it this past week, which tells me the pressure is still building. The longer price coils, the more important it is to stay prepared rather than complacent.

On a positive note, we did make a higher high and a higher low on the weekly chart. That’s constructive price action, even if it doesn’t feel exciting in real time. For now, my focus is on staying ready. A breakout move could come any day now, and I want to be positioned mentally and strategically when it does.

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