After Latest Trial Win, Should You Buy Gilead Sciences?
A big win for its twice-yearly HIV PrEP therapy has called for a new look at Gilead Sciences' trading charts.
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Gilead Sciences GILD has surged higher on Thursday on the heels of a trial win for a twice-yearly HIV PrEP therapy. Let's check and see what this rally has done to the charts.
In this daily bar chart of GILD below, I can see that prices broke a downtrend line (not drawn) and rallied above the 50-day moving average line. The slope of the 200-day moving average line is negative. The trading volume has been active since January but does not show an increasing nor a decreasing trend. The On-Balance-Volume (OBV) line has tracked prices lower since January. The Moving Average Convergence Divergence (MACD) oscillator has been improving since February but still remains below the zero line.
In this weekly Japanese candlestick chart of GILD below, I can see some lower shadows in the $64 to $62 area in recent weeks. Prices are up today but are still way below the declining 40-week moving average line. The weekly OBV line has been weak but trying to stabilize in recent weeks. The MACD oscillator is below the zero line but it has narrowed in recent weeks.
In this daily Point and Figure chart of GILD below, I can see that the software has projected a price target in the $83 area. There appears to be plenty of overhead chart resistance.
In this weekly Point and Figure chart of GILD below, I can see a potential price target in the $85 area but again this appears to be plenty of overhead chart resistance.
Bottom line strategy: Prices could do one of three things from here. We could see GILD surge higher and we should just go long at the market. We could see GILD trade sideways for a while after today's upside surge. We could take our time and wait for a shallow dip to be a buyer. Lastly, we could see GILD retrace these gains and retest the $64 area.
Stay nimble and keep an eye on the broad market averages.
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