WEED bulls take a stand

I'll readily admit today took me completely by surprise. I studied numerous charts last night and came to one conclusion - the sector would not have a bounce today because WEED's 4hr RSI was not low enough; it was only 32, when generally bounces happen from 27 or lower. WEED opened the day with multiple rejections from the high of CGC premarket, then saw a bear break to a V-shape recovery. This wasn't the bounce setup I wanted, it wasn't the price action I expected, so I sat out.

I missed the entire 8% move and I'll sit that out every single time when I'm not comfortable with the setup.

Three things today are worth noting

WEED bulls didn't roll over after the most significant bear break since June;
We bounced 10% from the low of yesterday to high of today, from RSI levels on the 4hr chart that are not historic bounce levels; and
We finished at the high of the day with a big bullish candle

The volume is a little lower than I would have liked to see, but we are expecting to set a lower high on the daily; Anything under 66.19 will be that lower high. Our new must hold level is 57.60 and that is the range I'll be watching.

The bulls were in full control all day and set no hourly supports; the chart is very extended. We've bounced enough that we would anticipate a higher low above 57.60, and the bulls will then have to break hourly resistance to see continuation of the oversold bounce.

I've been of the opinion we won't get a bull run into Oct 17th because we've been running already for 6 weeks. I've been watching the sector for two weeks waiting for bulls to show up and buy, warning we'd see profit taking and a bear break, which we saw yesterday, but I'm starting to look at the sector a little bit more bullish after today because I'm picking up on clues of some underlying bull strength. I'm not saying we will run into Oct 17th, but I was ready to rule it out last night and today I'm not so sure anymore.

It's all about 57.60 - 66.19 right now, and I expect we will top out soon before needing a healthy pullback on the hourly chart in order to see continuation.

By the way, I do analysis on the entire sector across all the mj charts I publish. If you're not looking at all the names I talk about, you're not getting the full sector-wide analysis. Follow me to get updates when I publish ideas and pay attention to the mj names you typically don't look at too, so you can stay in the know and get the full picture.
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