NEW YORK ( TheStreet) -- EMC  (EMC) broke through a key overhead trend line on Wednesday. Volume was a bit on the light side, but the price action was very positive. The stock gained just over 1.6% while breaking above the trend line that links the April and May highs. With a nice boost in buying pressure, EMC could extend this breakout move into a healthy rally.

EMC collapsed during the first two weeks of March. By late in the month, the stock was trading at fresh 2015 lows after dropping nearly 15% from its February close. In early April, a solid bottom began to take shape.

During this process, EMC has put in higher monthly lows in April and May and appears to be on its way to its third straight one in June. This narrowing consolidation was very pronounced last month. EMC spent all of May trading inside the April range while volume steadily contracted.

The result of this compressed, lackluster action now appears to be an upside breakout. Following Wednesday's rally, EMC is now a low-risk buy between $27 and $26.50. A close back below this week's low of $26.40 would render yesterday's breakout a failure.

A big challenge ahead for the stock is the May high at $27.35. If EMC can close above this level, it will be on course for a retest of its now-declining 200-day moving average. A pullback from this heavy resistance area, just below $28.25, following an initial test is likely.

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At the time of publication, Morrow had no positions in the stocks mentioned.