Gilead Sciences (GILD) is the 'Stock of the Day' at Real Money on Monday.
According to published reports, Fosun Kite Biotechnology has said in an exchange filing that an application for a cancer treatment was accepted by China's National Medical Products Administration. The company is a joint venture between Gilead Sciences' Kite Pharma and Shanghai Fosun Pharmaceutical (SFOSF) . (Also of interest to investors are the Wuhan-based clinical trials evaluating Gilead's antiviral drug remdesivir for the potential treatment of the SARS-CoV-2 infection which are proceeding slowly due to the lack of qualified participants.) All of this is well above my pay grade so let's look at the charts of GILD.
In this daily bar chart of GILD, below, we can see that prices largely traded sideways the past 12 months. GILD went up and down in about a $10 range from the $61 area on the downside to the $70-$71 area on the upside. Prices crossed above and below the popular 50-day and 200-day moving average lines several times but they are now above both averages which have positive slopes.
The daily On-Balance-Volume (OBV) line shows a rising pattern the past 12 months. Buyers of GILD have been more aggressive in the past year even as prices moved sideways. Underneath the neutral price action, accumulation can be seen - investors with foresight have been buyers.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line in early February and is pointed upwards in a bullish configuration.
In this weekly bar chart of GILD, below, we can see the price action of the past three years. Since December 2018 we can see that prices have made a base. The 40-week moving average line has bottomed.
The weekly OBV line shows a rise from December of 2018 and more recently a dramatic move to the upside.
The MACD oscillator made several cover shorts buy signals the past year before crossing the zero line this month for a buy signal.
In this daily Point and Figure chart of GILD, below, we can see a potential upside price target in the $78 area. With prices trading around $73 earlier in the pre-market a weekly perspective would help.
In this weekly Point and Figure chart of GILD, below, a potential upside price target of $88 is being projected.
Bottom line strategy: GILD is likely to start the day higher. Any modest intraday dip is probably a buying opportunity. New and existing longs should raise sell stops to a close below $66 for now. $78 and $88 are our price targets for now.
