Gilead Sciences (GILD) was raised to a fundamental outperform (buy) rating here on Tuesday by a Canadian sell side firm with a $100 price target. Let's dig into the charts and indicators of the biopharmaceutical company to see if this is a good time and place to buy Gilead.
In this daily bar chart of GILD, below, I can see that prices have been correcting the past five-and-a-half months. GILD trades below the declining 50-day moving average line but has (so far) successfully tested the rising 200-day moving average line. The trading volume has declined since the middle of December. The On-Balance-Volume (OBV) line shows a modest decline from January. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line in bearish territory but it is narrowing toward a possible cover shorts buy signal.
In this weekly Japanese candlestick chart of GILD, below, I see a positive-looking longer-term picture of the price action. Prices are testing the rising 40-week moving average line. I can see a lower shadow on a recent candle, telling me that traders rejected the lows. Another candle with a lower shadow can be seen at the same price area in March. GILD made a big base in 2020-2022 that supported the rally this year. The weekly OBV line shows a longer-term rise with only a modest period of weakness from November. The MACD oscillator has been correcting but is still above the zero line.
In this daily Point and Figure chart of GILD, I can see an upside price target of $107. That's a little higher than the fundamental price target.
In this weekly Point and Figure chart of GILD, I can see the same upside price target of $107.
Bottom line strategy: In my March 27 review of GILD I looked for GILD to retreat and that has happened. With the test of the 200-day line traders could return to the long side, risking a new low for the move down.
