EDCI

[David Randolph]

Today I'll keep my mouth shut. I will just present the charts, they will sing for me, just prepare your ears for the music.

GEMS long term:



GEMS short term:



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[seadog]

What is your take

[AussieTrader]

The $3 area is a key pivot I think. Look at a 2 year weekly chart GEMS is sitting just above the 200ema which is at $2.93. If it can take out most recent high of $3.10 with vol confirmation then it could move nicely, however it may be due a pullback after so much strength from the $2 breakout point. Its on my watch list for sure
JMHO
Mike

[David Randolph]

Hello guys !

GEMS is still in a pronounced uptrend, but the two last candles suggest a loss of momentum. Probably I'll have to sell this one on Tuesday, I need to be always riding the faster horses.

[David Randolph]

... I didn't sold GEMS on Twesday, but I'm definetely going to sell today. Loss of momentum and some red candles ... take profits and move on.

[David Randolph]

GEMS

[David Randolph]

Glenayre Technologies Inc. (GEMS) The Group's principal activity is to provide communication solutions for communications service providers, including wireless, traditional and broadband carriers.

I've made a profitable trade on GEMS, but I sold too soon, when the stock reached a technical target.

GEMS kept on climbing and forming a pretty steady medium term bullish uptrend:



I was watching it rise from the sidelines, thinking I had to buy back these shares, but not taking action. Well, now that the stock closed above a medium term resistance around the $4.3 level I simply can't ignore it anymore and I need to jump on board:



I know what you're thinking: «but it's up so much now, shouldn't David wait for a pullback to buy?». I don't think I should wait for a pullback, it's is impossible to accurately predict if profit taking or short term weakness will hit GEMS at this point. What I know is the trend is bullish and a resistance has been broken, so I need to have a position in this stock.

For everyone thinking it just rose too much, take a look at this historical chart:



Changed your mind?

I see insiders are buying stock, I'll buy too !

(This analysis was part of the Top 10 for Tuesday thread. At the end of the thread I've decided to buy GEMS for the 3 Stocks on Fire Portfolio)

I've started this new thread so later I can update the GEMS analysis everyday after the close until I sell the stock.

[David Randolph]

I'm running out of time before the opening bell and I still need to eat something, so I'll just leave this annotated chart of GEMS. Of course I won't be selling the stock today, I'm very pleased I have this stock in the 3 Stocks on Fire Portfolio.

[mads888]

David, thanks a lot for this site. I have learned a lot from this site. This site has energized me to read something about technicals, which I find very interesting. I am a novice in the technicals, so please bear with me, if I post something wrong.

Looking at this stock, I find a negative divergence in MACD. What do you think the short term implications for this stock? Does the length of positive/negative divergence play a role? Is this negative divergence too small (a period) to worry about?

Thanks,
Mads

[David Randolph]

Thanks for your post mads88 

That divergence you got there, between the MACD and price, is a valid technical indication. But,  a technical analyst can't consider just one or two indications, he should have many indicators pointing the same way, as confirmation.

That divergence probably is just reflecting a loss in momentum from GEMS (which is also a bearish indication), but that loss in momentum probably just reflects a deceleration in trend which was going too fast and getting away from major trendlines.

Now, what is more important, the speed of the trend or the trend itself? The trend itself.

As long as a trend remains bullish a technical analyst should hold the stock. The signs you're referring are signs the trend may reverse, but as long as a trend remains bullish a technical analyst should hold the stock. During an uptrend many times it looks just like it will reverse, but the majority of the times it just continues

Considering GEMS, the bullish trend is still pretty much in place, according to the ascending blue trendline on the chart. My plan is to hold the stock until we get a close below that trendline, which today will be at $3.97.

[mads888]

Thanks a lot David.

It is always good to hear an expert's opinion.

Mads

[David Randolph]

Support today for GEMS at $4, don't want to see it close below that mark, or I'll have to take my loss and learn something from mads888 

[makemoney13]

This one needs to recover soon and stay in the 4 range for a rebound

[makemoney13]

Down to 3.80 right now- not good

[stocky]

Plenty of buyers below 4, so does not see any reason to sell here.