Gilead Sciences Inc. (GILD) was last reviewed in July where I wrote that, "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." GILD has dipped a little in recent weeks but it has not come close to our stop recommendation. Today prices look even stronger than in early July. Let's check the charts again.
In this daily bar chart of GILD, below, we can see a base pattern with two "shoulders" in November an April and a "head" in May with another "shoulder" in August and September. Prices are holding above the flat 200-day moving average line and above the 50-day average. The daily On-Balance-Volume (OBV) line is leading prices as it just made a new high for the move up. The trend-following Moving Average Convergence Divergence (MACD) oscillator signaled a cover shorts buy earlier this month and is very close to crossing the zero line for an outright go long signal.
In this weekly bar chart of GILD, below, we can a low in the middle of 2017 and another low in April of this year. A rally above $90 will complete this large base pattern. Prices are above the slightly rising 40-week moving average line. The weekly OBV line is strong and tells us that there has been good accumulation. The weekly MACD oscillator sits on the zero line and renewed price strength should quickly turn it to a buy signal as it moves above the zero line.
In this Point and Figure chart of GILD, below, we can see an upside price target of $98.30. A rally to $79.05 would be a breakout.
Bottom line strategy: with the OBV line leading on the upside I think traders who are already long GILD should buy more and if you are flat this is a good location to go long. Risk to $70 and add above $79. $90 and then $100 are my longer-term price targets.