Gilead Surges on Remdesivir Report: How to Play the Stock Now

We have a new price target for GILD.

Shares of Gilead Sciences Inc. (GILD)  are soaring Friday morning on a report of preliminary results from a study in Chicago evaluating the company's remdesivir drug in severely ill Covid-19 patients. Many of these patients saw rapid recoveries in fever and respiratory symptoms and almost all patients were discharged in less than a week. Pretty impressive and very encouraging.

We last covered GILD on April 7 where we wrote, "Part of the art of technical analysis is using the right kind of chart and indicators at that particular point in time. Sometimes a candlestick chart is better than a bar chart at turning points and sometimes momentum is a better tool at tops and bottoms than the MACD oscillator. Experience. GILD is in an uptrend and traders and investors could use available weakness to go long. Risk a close below $69."  

In the updated daily bar chart of GILD, below, we can see that prices have kept up their frantic up-and-down trading pattern. Prices have still made higher lows over the past week and have stayed above the rising 50-day moving average line. The 200-day moving average line still has a positive slope but I would not have expected otherwise.

The On-Balance-Volume (OBV) line and the Moving Average Convergence Divergence (MACD) oscillator have continued their short-term jiggles. 

 

In the weekly bar chart of GILD, below, we can see that prices have made a rounded bottom pattern or some may call it a saucer pattern or even a cup-and-handle pattern. The results are more important than what we label the action. 

 

 

In this monthly bar chart of GILD, below, we get the 35,000-foot view. Here we can imagine that prices could head back to the highs of 2014-15.

 

 

In this weekly Point and Figure chart of GILD, below, we can see a potential upside price target of $95. 

 

 

Bottom-line strategy: Longs could raise sell stop protection to a close below $72 for now. Our new price target is $95.

 

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