In my previous video, I discussed the importance of the monthly trigger as a key level for price to break above in order to trigger a significant short squeeze or bullish push higher. I mentioned that I didn't think it was likely for price to break above the monthly trigger in May, but I was proven wrong when price not only broke through it, but gapped over it entirely.
This type of price action is common in highly shorted equities when the monthly trigger is broken, as it often triggers a powerful push higher as smaller funds exit their positions and trend-following traders and FOMO buyers push the price up.
It's important to note that the monthly trigger is a strong level of support, but it's also important to consider velocity when evaluating its strength. In the case of the recent monthly trigger breakout, the strong monthly velocity that was present when price was above the trigger was no longer present when price broke below it, leading to a significant drop in price.
Now that price has broken above the monthly trigger, it's likely that we will see a powerful move higher as momentum-based algorithms and trend-following traders begin buying dips. It's also worth noting that the weekly trigger will need to cross above the monthly trigger in order for the bullish trend to continue.
In the case of GME, the recent move higher is nice, but it's important to remember that it's likely just the beginning of the move. The daily and weekly triggers are still far from crossing above the monthly trigger, and it's likely that we will see some dips along the way. However, as long as price remains above the monthly trigger, the overall trend is likely to be bullish.
In the coming months, I expect the hourly and daily triggers to slowly cross above the monthly trigger, putting GME in its most bullish trigger orientation. This will likely lead to a continuation of the bullish trend and a steady climb higher for the stock.
In summary, the recent break above the monthly trigger in GME is a positive development, but it's important to remember that this is likely just the beginning of the move. As long as price remains above the monthly trigger, the overall trend is likely to be bullish, and we can expect to see a continuation of the trend in the coming months.