Typically, it's a winning strategy to look at entering a stock after the shares undergo a symmetrical pullback within a larger uptrend -- meaning a decline that's very similar to prior pullbacks in the name. Of course, it won't work all the time, but it does succeed more often than not. That's especially if you wait for particular reversal indications, such as what I discuss below, that tell you it is actually worth placing a bet.
With that in mind, Gilead (GILD) is starting to look interesting to me. The larger pattern is still considered bullish, technically, as long as the price continues to hold above the Oct. 15 swing low. For this reason, I'm only setting up support that comes in above that level.
That said, the only retracement that overlaps the "symmetry"-based projections (i.e., measured moves) from the prior declines is the recent 0.786 retracement back to that Oct. 15 low. This gives us two areas to watch for possible support and buy triggers in Gilead. The first one comes in at the $97.10-to-$99.59 area, and the second is around $95.45.
Right now the minimum target for a rally comes in around $121.41. If Gilead does hold above one of these two areas, the actual, usable target will be calculated from the lowest low in the zone.
Beyond Gilead, I also have a buy-side price-cluster setup to consider in YY (YY). I'm seeing three key price relationships between $70.86 and $72.06, as illustrated on the daily chart below: There is a 0.786 retracement of the prior swing, a 100% projection of a prior decline and a 1.618 extension of another prior rally.
So far we are seeing a bit of a rally off that zone, and at this point I'd like to consider buying a pullback to this recent low, with my risk defined below it. If the price continues to hold above this area, the initial upside target comes in at $89.94. If, instead, this key support is taken out, I'll consider the trade a bust.
Please refer here for more information on trade triggers.
See here for general guidance on Fibonacci trade setups.