Gilead Sciences (GILD) was mentioned on Mad Money last night. GILD has been trying to turn itself around, but few, including Jim Cramer, see that turn coming any time soon. Let's see if the charts tell us the same story.
In this daily bar chart of GILD, below, has been struggling to mount a sustained rally. There was a decent, tradeable rally from early May to July/August but prices made a double top in early October and have turned south. Is this the start of a new downtrend or just part of a longer base-building process? GILD is below the declining 50-day moving average line and the bearish 200-day moving average line. The daily On-Balance-Volume (OBV) line is interesting in that it has risen the past twelve months - not always in a straight line, but it has gone up significantly and suggests that buyers have been more aggressive even this October. The Moving Average Convergence Divergence (MACD) oscillator has narrowed recently and could generate a cover shorts buy signal.
In this weekly bar chart of GILD, below, we have mixed signals. GILD is trading below the declining 40-week moving average line. The weekly OBV line shows some weakness the past month but it has not turned lower into a downtrend. The MACD oscillator just crossed the zero line for an outright sell signal.
In this Point and Figure chart of GILD, below, we can see a downside price target of $57.78 being projected. If GILD reaches this $57 objective it will be a new low for the move down and would break the lows of 2017 and 2018.
Bottom line strategy: unless GILD can rally above the $76-$80 resistance area, I would operate with a more defensive strategy going forward.