Gilead Sciences (GILD) is up sharply today but regular readers of our column should not be too surprised (). In our recent update we said, "GILD only turned positive in late June, so we are not far off the lows, with plenty of room on the upside. Aggressive traders could buy available weakness, risking a close below $68. Add to longs on a close above $76, looking for gains to around $86." With GILD now trading around $80 we want to adjust the parameters.
In this daily bar chart of GILD, below, we can see how prices have surged past its early August high. The 50-day moving average line continues its strong move higher and the flat 200-day moving average line could soon turn positive. The daily On-Balance-Volume (OBV) has confirmed the price strength as it has made a new high for the move up signaling aggressive buying. The daily Moving Average Convergence Divergence (MACD) oscillator is crossing to the upside above the zero line for a fresh outright go long signal.
In this updated Point and Figure chart, below, we can see the rally to $80 and a new higher potential price target of $88. There is not much chart resistance above $88 so further gains are possible.Bottom line -- even novice chart readers will recognize the breakout on GILD today. Prices could pause or "rest" in the short-run, but further gains to the upper $80's are anticipated. Raise stop loss protection to a close below $72.