With its very popular Sovaldi drug for hepatitis C patients, Gilead Sciences (GILD) has launched itself onto the mainstream of successful biotech companies. With its big acquisitions in recent years Gilead has become a formidable player against other big pharma companies like Pfizer (PFE), Merck (MRK:), Amgen (AMGN), Biogen (BIIB), AbbVie (ABBV) and Sanofi (SNY).
However, until recently the stock has been a massive under performer.
The chart shows a narrowing wedge pattern of lower highs and higher lows going back to mid-December. While the price is up year-to-date, it is nowhere near the strong performance of other names in the IBB (biotech index). In fact, Gilead has been a laggard, but that may soon change.
Tuesday saw robust volume and a price breakout from the wedge on very good price action, the best since early January when it jumped 10% in a matter of days. The Moving Average Convergence Divergence (MACD) indicator buy signal is in effect and strengthened even more. The slope of the Relative Strength Index (RSI) is very strong, with a continuation day that could forge a new move higher and beyond the hold highs near $110. Earnings are out next Thursday, April 30, after the market close.
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