I haven't looked at the charts of Gilead Sciences Inc. (GILD) for a while. With some attention being focused on biotech names Friday morning (see my analysis of Biogen (BIIB) here and two biotech ETFs here) a review of GILD seems like a good idea. The daily chart looks like it could use more development but the weekly bar chart shows us a strong bottom formation. Let's check further.
In the daily bar chart of GILD, below, you can see a wide swinging market. Sharp rallies and big corrections. In early May notice a downside price gap taking prices down to the lows of 2017. What is interesting is that prices recouped those losses fairly quickly and Thursday prices broke out to a new high above the June highs. GILD is above the still declining 50-day moving average line but only a few dollars below the bearish 200-day average line.
Now you have to really look at the daily On-Balance-Volume (OBV) line. GILD declined from near $90 to near $66 and the OBV line is pretty steady the entire time from February. A steady OBV line in a declining market suggests that longs have largely held their positions despite the decline. That sounds very bullish to me.
The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line last month and is in a bullish mode.
In this weekly bar chart of GILD, below, you can see a "double bottom like" pattern with two lows around $65. A weekly close above $85 should complete the base. Prices are currently below the declining 40-week moving average line but a weekly close (today?) above $75 would break it.
The weekly OBV line shows a low in June of 2017 followed by a positive trend. The weekly MACD oscillator is crossing to the upside from below the zero line -- this is a longer-term cover shorts buy signal.
In this Point and Figure chart of GILD, below, I can see a $78.98 price target. A rally to $79 will put GILD above the 40-week average line and the 200-day line.
Bottom line: I have no idea what GILD may have in its pipeline but the weekly bar chart suggests the stock could see longer-term gains to the $110 area if it can close above $85. Aggressive traders can go long on strength risking below $68 for now.