A member request came through last week for Geron Corporation (GERN). Due to a client emergency I am late in getting the request out. I apologize for the tardiness but hope to make up for it with the analysis!
Geron Corporation (GERN) is a clinical stage biopharmaceutical company focused on the development of a telomerase inhibitor, imetelstat, in hematologic myeloid malignancies. What does that mean? Well, its better to read it right from the company website….
So now that you have a little background on Geron Corporation (GERN), let’s jump to the charts.
Geron Corporation (GERN)
Before I look at the normal 20 year chart for Geron Corporation (GERN), I want to start with this 5 year weekly candlestick chart. This chart shows that GERN made an explosive move from the mid to lower $2 range to a high of $6.68 during the week of March 19, 2018. I put a few notes on the chart about some probable chart activity from an Elliott Wave perspective.

Analyzing Geron Corporation (GERN) From an Elliott Wave Perspective on a 5 Year Weekly Candlestick Chart
The volume spike during the week of March 19 was the largest volume spike on record for the company, a bullish sign. That buying volume spike came on the breakout from a Symmetrical Triangle chart pattern.
If the Symmetrical Triangle chart pattern does represent Waves 1 and 2 in a Bullish Impulse wave pattern, then Wave 5 should break above the $6.68 high from the week of March 19, 2018. To estimate the length of Wave 5 I simply drew a trendline for Wave 3 and then duplicated the trendline. I took the duplicated trendline and placed the bottom of it where the Wave 4 pullback could have ended 2 weeks ago.
The purpose of a Symmetrical Triangle pattern is a lot of volatility. All of this volatility removes most sellers before the next big move upwards. Big moves typically follow a lot of volatility.
If the Bullish Impulse wave pattern develops as I’ve illustrated above, Wave 5 should push towards the $7.79 high from November 2013. Printing a $7.80 mark on the chart would be a definite bullish sign indicating to purchase shares on the pullback from the $7.79 area. Yes, I would think that GERN would try to print the $7.80 and even push a little higher only to get pushed back below the $7.79 area for a consolidation period.
20 Year Monthly Candlestick Chart
Now let’s take a peek at the 20 year monthly candlestick chart for Geron Corporation (GERN). I left the couple of trendlines from the above 5 year weekly chart for perspective.
One thing that is clear is the buying in March 2018 was the largest buying on record for the last 20 years, definitely something that is noteworthy. That huge amount of buying volume could be just what GERN needs to try and finish developing a Bullish Impulse wave pattern to start off a new uptrend.
When I looked at this chart, the first thing that came to mind was how it kind of reminded me of Micron Technologies (MU) chart when it was in the $8 range and trying to start its uptrend a couple years back. It all has to start somewhere. And if GERN can finish developing a Bullish Impulse wave pattern and print a $7.80 mark in the next couple of weeks, it could be starting for GERN.
GERN – Short Interest
Now before you get too excited or bullish about GERN the one item to note is the number of shares that have been sold short. This is also known as the short interest. According to this article from the Motley Fool the short interest for GERN reached an all-time high of 44 million last month.
An all-time high of short interest could be a good or it can be bad.
Good – It can be good if you buy in to go long at suppressed prices after most of the short selling has been done. You then have to typically wait for a positive catalyst that causes the short sellers to start covering.
Bad – It can be bad even if you buy in at low prices because a high short interest total is a high “conviction” that something is wrong with the stock. It takes mare risk to short sell a stock then it does to purchase a stock and go long.
Without a positive catalyst, a stock such as GERN could continue to see short selling pressure. But the Motley Fool article alludes to things coming to a head a little later this year around September. The article has a bullish undertone that definitely makes sense from an outside perspective.
GERN – Symmetrical Triangle Scale-In Purchase
So has Geron Corporation (GERN) peaked your interest? It has mine, so in the next chart I illustrate how to make a scale-in purchase for a stock that has broken out of a Symmetrical Triangle. This is a 1 year daily candlestick chart.

Analyzing a Short-Term 1 Year Daily Candlestick Chart for Geron Corporation (GERN) for an Entry Price
I extended the green lower trendline from the Symmetrical Triangle all the way to the right side of the chart. A revisit to this lower trendline area is one of the least risky areas to jump on a stock that has pulled back after a huge breakout.
While selling volume has been decreasing overall during the pullback, the MACD Histogram is just starting to show an increase in selling momentum again. This increase in selling momentum could be just what the share price needs to pullback to the lower trendline from the Symmetrical Triangle pattern. This seems like
Geron Corporation (GERN) – Summary
The chart prospects for Geron Corporation (GERN) are starting to look bullish. If GERN can go ahead and reach the $7.80 price level in the next month or two, then purchasing the pullbacks for GERN just became less risky going forward at that point. Less risk is always welcomed when investing and trading.
But for now, remain diligent and patient to look for an entry to go long. Trading platforms like Think or Swim let you set an alert when the share price crosses above or below a trendline. I would recommend setting such an alert for GERN using the lower trendline from the Symmetrical Triangle as the alert notice.
I am still having difficulties with comments at the end of articles so for now please leave any comments or questions in the Idea Chamber. I hope to have the comment issue resolved soon.
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