Technical Summary: The technical picture for GEM is interesting, “it is all happening” says the rugby league commentator. Starting with the big picture. The stock has been consolidating for the last two and a half years after a massive rally took it from $1 to around $5.50 per share. There appears to be an area of support at around $3 per share while there is upside resistance at around $4 per share. From the 1 year low on the left hand side of the chart the stock rallied 40% into $4 resistance and pulled back 25%. This appears to be the marking of a volatility contraction pattern (VCP). This setup can be reliable because smaller pullbacks can indicate that overhead supply is drying up. The stock recently attempted a
high volume breakout from this pattern. We would now like to see the stock rally towards $4 again with successive smaller pullbacks before breaking through resistance on high volume. We will be paying close attention to GEM for such price action.